Coinbase, a leading cryptocurrency exchange, saw its shares drop 11% in pre-market trading on Friday, poised to hit a one-month low after reporting a decline in second-quarter adjusted profit. The downturn, driven by reduced trading activity, has put the stock on course to lose nearly $11 billion in market value if the trend persists. Shares were last recorded at $335.33.

Despite a robust 52% gain in stock value this year, placing Coinbase among the top 15 performers in the S&P 500 index, which it joined in May, analysts have raised concerns. Morningstar’s Michael Miller noted, “We see the shares as significantly overvalued, with the market banking on unrealistic future growth.”

The sharp market reaction highlights the difficulties Coinbase faces in maintaining its recent revenue momentum in the volatile crypto sector. In contrast, competitor Robinhood reported a near-doubling of its crypto trading revenue for the same period, underscoring Coinbase’s larger exposure to market fluctuations.

Subdued trading volumes, fueled by bullish sentiment that encouraged investors to hold assets, contributed to lower volatility and weaker performance for Coinbase. However, analysts remain optimistic about a potential rebound, citing the company’s July revenue projections and a surge in crypto enthusiasm following the signing of the Genius Act, which propelled bitcoin to an all-time high.