Coinbase Global Inc (NASDAQ:COIN) confirmed that full-year revenue plunged in 2022, with CEO Brian Armstrong himself forecasting that the company will make less than half of what it did in 2021.

The Analyst: But, a new downgrade from Dan Dolev at Mizuho Securities for the stock could cast a shadow over 2023 and raises new risks for the crypto broker.

Mizuho downgraded Coinbase to Underperform from Neutral, lowering the price target to $30, from $42, concerned that the interest income Conibase earns from Circle’s stablecoin, USD Coin (CRYPTO: USDC), could be unsustainable.

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The Takeaways: “Interest income from Circle's USD Coin (USDC) has been increasingly important for COIN amid deteriorating crypto sentiment and trading volume. We estimate it accounted for 10-15% of [Coinbase’s] 3Q revenue,” the analyst wrote.

The analysts stressed that their study is only speculative, but they are concerned that the arrangement between Coinbase and Circle may be modified in the future, siphoning even more revenue away from Coinbase.

This comes on top of Armstrong's admission that the company's revenue would be less than half of what it was last year.
“We see several factors that could potentially lead Circle to attempt to amend the relationship in the future,” Mizuho analysts noted Circle's recent cancellation of plans to go public through a merger with a SPAC.

Next: Coinbase Waives Fees On Tether-To-USDC Conversion As It Urges Shift To 'Most Dependable Digital Dollar'

COIN Price Action: Shares of Coinbase are trading 3.18% lower to $41.43 Friday. The stock has a 52-week high of $281.99, and a 52-week low of $40.30, according to Benzinga Pro.