Coinbase Retail Take Rates Look Unsustainable, Says Mizuho — Robinhood Competition Could Force Further Fee Cuts

Mizuho says Coinbase’s new fee structure begins addressing trading costs but expects competitive pressure to spread beyond its most active users, according to TheFly.

• According to Mizuho, Coinbase's fee cut is the first step toward right-sizing crypto trading costs.
• Coinbase’s retail take rates are too high, especially compared with Robinhood, Mizuho said.
• Mizuho reiterated a 'Neutral' rating and $155 price target on COIN stock.

Coinbase Global Inc. (COIN) drew scrutiny from Mizuho after lowering fees for many active traders on Coinbase Advanced, with the firm saying the move could be the beginning of broader pricing pressure across the platform, according to TheFly.

Mizuho reiterated a 'Neutral' rating and $155 price target on COIN stock, calling the changes the “first step to right-sizing the costs to trade crypto”. 

The firm has argued that Coinbase’s retail take rates —the fees it earns relative to trading activity — are too high and likely unsustainable, particularly compared with Robinhood Markets Inc. (HOOD), per TheFly.

Coinbase Lowers The Bar For Cheaper Trading

This follows Coinbase's Wednesday announcement that it is lowering spot-trading fees for many active traders globally and making reduced rates easier to reach. The changes took effect on Sept. 16.

One of the changes is that Coinbase Advanced fee tiers now begin at $10,000 in qualifying trading volume, down from $25,000. Spot and derivatives activity can also now be combined when determining a customer’s volume tier in eligible markets.

Customers can also qualify for VIP fees based on their USDC holdings, while Coinbase said its highest VIP tier offers spot crypto trading fees as low as zero basis points for makers and two basis points for takers.

Shannon Kurtas, Coinbase’s senior director of product management, said the changes are intended to help active traders more easily scale multi-asset trading as the company expands its “Everything Exchange.”

Mizuho Sees Pressure Moving Toward Retail

Mizuho’s focus, however, is on what the fee reductions could mean beyond Coinbase Advanced. According to The Fly, the firm believes competitive pressure that began in Coinbase’s active-trader segment could eventually work its way down to retail customers. 

Mizuho specifically pointed to Robinhood when arguing that Coinbase’s retail take rates remain elevated. That view aligns with the firm’s existing caution regarding Coinbase’s reliance on transaction revenue.

Retail Sentiment Around COIN Stock

Retail investor sentiment surrounding COIN stock remained ‘bearish’ on Stocktwits amid high message volume. 

So far this year, COIN stock has fallen more than 29%, while HOOD shares have fallen over 6%. In comparison, ARK Innovation ETF (ARKK), which holds both stocks, has risen more than 9% during this period.

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