Coinbase stock jumps as Jefferies expects crypto exchange to weather FTX fallout

Coinbase Global ( COIN ) stock spiked 16.4% in Monday morning trading as Jefferies analyst Trevor Williams started coverage of the cryptocurrency exchange with a Hold rating on expectations that it will be able to weather the industry-wide fallout from failed crypto platform FTX ( FTT-USD ). Williams pointed to Coinbase's ( COIN ) strong balance sheet with over $5B in cash, its "front-footed approach to regulatory compliance" and its limited exposure to FTX ( FTT-USD ), he wrote in a note. However, "the immediate impact is decidedly negative with trading volumes facing incremental pressure" amid a prolonged bear market, he warned. Over the past two years, well before the abrupt downfall of FTX ( FTT-USD ) in November 2022, Coinbase's ( COIN ) market share has trended negatively, though "we expect some of these losses to be pared in the near-term ... as COIN can re-establish its status as the de-facto on-ramp into crypto, should we see another up-cycle," Williams contended. Coinbase ( COIN ) had the second biggest share of crypto trading volume in 2022 with a 8.2% market share in December, falling way behind Binance's 66.7% market share. Meanwhile, Seeking Alpha contributor Serge d'Adesky recommended readers to short COIN as the FTX fallout sparks a huge flight from crypto trading. By contrast, fellow SA contributor Mike Fay sees COIN as a Buy, citing tailwinds such as increased U.S. crypto regulations .