Coinbase nabs Underweight rating at Wells Fargo; Riot, Bakkt started at Equal Weight

The lingering cryptocurrency downturn has driven Wells Fargo analyst Jeff Cantwell to be cautious with his crypto-related coverage, as he initiated Coinbase Global (NASDAQ:COIN) with an Underweight rating Thursday and set Riot Blockchain (NASDAQ:RIOT) and Bakkt (NYSE:BKKT) to Equal Weight. While bitcoin (BTC-USD), +0.8%, and other major digital tokens caught a bid in early morning trading, shares of COIN (-3%), RIOT (-3.1%) and BKKT (-1.3%) dipped premarket as stock index futures pointed to a lower opening. In addition to the challenging crypto environment, Coinbase's (COIN), America's largest crypto exchange by trading volume, rising competition from other prominent exchanges like Binance and FTX will eat into its market share, Cantwell wrote in a note to clients. "We see its early-mover advantages gradually being eroded away as the competition increasingly mimics the COIN ecosystem," the equity analyst pointed out. Binance's recent move to eliminate trading fees for bitcoin (BTC-USD) and ethereum (ETH-USD) will put downward pressure on Coinbase's (COIN) retail pricing over time, thus weighing on its revenue growth and margins, Cantwell explained. Take a look at why SA contributor Serge d'Adesky justifies COIN with a Hold rating. For crypto miner Riot Blockchain (RIOT), Cantwell believes its revenue and EPS expansion will be further constrained, as "lingering impacts from 'crypto winter' and a weaker macro environment going f...