Coinbase stock slides as Daiwa removes bull rating in wake of Binance-FTX deal

Coinbase ( NASDAQ: COIN ) stock fell 6.6% in Wednesday premarket trading as Daiwa downgraded the cryptocurrency exchange to Neutral from Buy as the high-profile Binance-FTX deal sent shockwaves to the cryptosphere, with bitcoin ( BTC-USD ) down as much as 11.5% to $17.13K in the past day. Earlier this week, Binance, the world's largest crypto exchange by trading volume, signed a non-binding agreement to buy the non-U.S. business of rival FTX in what some refer to as a bailout acquisition as the latter undergoes a liquidity crunch. As the potential deal put crypto investors on edge, "we believe Coinbase will still suffer from the beta risk of simply being associated with the crypto sector in the near term," Daiwa wrote in a note to clients. Nevertheless, "we continue to see Coinbase as a major long-term winner in the centralised exchanges space." Daiwa noted it doesn't seem that FTX's sister trading firm Alameda Research, of which its finances were brought into question given its huge holdings in FTX's troubled crypto FTX Token ( FTT-USD ), is included in the Binance-FTX deal. That "could be a major source of risk to crypto markets as Alameda unwinds its illiquid positions (mostly FTT or related tokens, and other Solana ( SOL-USD ) ecosystem altcoins), while other lender to Alameda may start to disclose their bad debts in the coming weeks," the note read. Meanwhile, in an effort to calm investors worried about potential liquidity and credit risk from cryptocurrency exchange FTX Token ( FTT-USD ), Coinbase ( COIN ) said recently that it has minimal exposure to Sam Bankman-Fried's FTX and zero exposure to FTT. Daiwa's Neutral rating diverges from the Quant's Sell rating as well as the average Wall Street analyst rating of Buy. Seeking Alpha contributor Bill Maurer contended that Coinbase stock could reach new lows due to the panic spreading around FTX .