Analysts from Compass Point have downgraded Coinbase's stock to 'Sell' from 'Neutral', lowering the price target to $248 from $330. This shift comes after Coinbase reported a disappointing second-quarter performance, with transaction revenue plummeting by 39% to $764 million, alongside a 6% decline in subscription and services revenue, totaling $656 million. The analysts attributed these declines to reduced interest from retail investors and increased competition from decentralized exchanges and stablecoins. Despite sharing concerns over the retail trading business being disrupted, about 15% decline in stock value since earnings was partially offset by a 1% increase on Monday, reflecting a 28% year-to-date stock rise. As the crypto market faces challenges, including competition in the stablecoin sector, Compass analysts believe the firm's valuation will face pressure if the market continues to dip. Notably, Coinbase benefited from a $1.5 billion windfall from its investment in Circle, a stablecoin issuer, amid legislative changes expected to impact the landscape.

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