Mizuho: Coinbase's Retail Take Rates Unsustainable Amid Competitive Pressure

Coinbase's recent fee cuts have brought its trading costs more in line with competitors like Robinhood, but analysts at Mizuho believe the pressure to reduce fees will only continue. The firm argues that Coinbase's retail take rates are unsustainable and will eventually trickle down to less active traders.

Mizuho notes that the lower fees are the first step towards 'right-sizing' trading costs for crypto assets. This change is expected to have a broader impact across the platform, pushing Coinbase to continue reducing its fees in response to competition from Robinhood Markets Inc.

Coinbase's new fee structure lowers spot-trading fees for active traders globally and makes it easier for customers to qualify for VIP fees based on their USDC holdings. The highest VIP tier offers spot crypto trading fees as low as zero basis points for makers and two basis points for takers.

Mizuho has maintained a 'Neutral' rating and $155 price target on COIN stock despite the recent changes, citing concerns over Coinbase's reliance on transaction revenue.