"We believe COIN will need to make substantial reductions in its cost base in order to stem the resulting cash burn as retail trading activity dries up," an analyst says.
Goldman Sachs has downgraded Coinbase's stock to a sell rating — with analysts suggesting that further layoffs may be needed to help the exchange bring costs down to a manageable level.
The damning research note saw COIN's share price fall by 10.76% on Monday — and over the past year, the stock's plunged by 77%.
Predicting that the exchange will need to make tough decisions in the weeks and months ahead, Goldman analyst Will Nance wrote:
"We believe COIN will need to make substantial reductions in its cost base in order to stem the resulting cash burn as retail trading activity dries up."
Trading fees represent a huge part of Coinbase's overall revenue — but the company has been trying to diversify its income streams of late.
Nonetheless, there are fears that a race to the bottom on fees, with rival platforms attempting to entice customers by reducing commission or removing it altogether, could harm Coinbase's profitability.
Data from Bloomberg suggests that there are 20 buy ratings on Coinbase's stock right now, alongside six holds and five sell recommendations.