Coinbase Global Inc., the largest U.S.-based cryptocurrency exchange, has been downgraded by JPMorgan Chase & Co. from neutral to underweight. 

The investment bank’s analysts suggest that the anticipated Bitcoin exchange-traded fund (ETF) may not meet market expectations, impacting Coinbase’s revenue. This downgrade comes as the crypto industry faces a period of heightened scrutiny and volatility.

The analysts pointed to the launch of spot Bitcoin ETFs in the U.S. as a catalyst that might disappoint investors, as it could draw trading volume away from platforms like Coinbase. 

The introduction of such a fund is expected to provide a more accessible route for institutional and retail investors to invest in Bitcoin, potentially reducing the need for services offered by exchanges.

Coinbase is currently in a court battle against the U.S. Securities and Exchange Commission. In June 2023, the SEC sued Coinbase for operating as an unregistered securities exchange, broker and clearing agency.

Coinbase shares on the Nasdaq dropped 2.64% today, as of 3:20 p.m. ET.