Analyst: this bitcoin stock is a better buy than Coinbase

• D.A. Davidson analyst downgraded Coinbase stock on Thursday.
• Chris Brendler says RIOT has potential to rally a lot more.
• Both crypto stocks are currently up more than 100% for the year.

The massive year-to-date rally in Coinbase Global Inc (NASDAQ: COIN) should be seen as an opportunity to cut your exposure to this name, says Chris Brendler. He’s a Senior Equity Analyst at D.A. Davidson.

Brendler sees downside in COIN to $60

On Thursday, Brendler downgraded the crypto exchange to “neutral” and announced a price objective of $60 that represents about a 15% downside from here. In a research note, he said:

FTX debacle is still reverberating. While we agree with management’s view that improved clarity and a level playing field should be good, near-term path looks increasingly treacherous.

The analyst particularly quoted regulatory challenges as a meaningful headwind. Last week, the SEC ordered Kraken to terminate crypto staking in the United States – which is concerning for Coinbase since it offers similar services as well.

Coinbase is expected to lose $2.39 a share in its current financial quarter versus $3.32 of per-share earnings a year ago.

Brendler sees more upside potential in RIOT

On the flip side, Bitcoin surpassed $25,000 today for the first time in more than six months that paints somewhat of a rosy picture for the crypto space at large.

According to Brendler, though, there are better alternatives to play that strength in BTC prices than Coinbase. One such substitute that pops out to him is Riot Platforms Inc (NASDAQ: RIOT).

You don’t need to own Coinbase to play bitcoin, miners like RIOT with no debt and bitcoin on their balance sheet have potential to rally a lot more than Coinbase.

Last month, the Nasdaq-listed firm said it produced a record 740 bitcoin in January. As of the end of January, Riot held roughly 6,978 BTC in total. For the year, Riot stock is also up more than 100% at writing.