Coinbase bulls point to crypto legislation and stablecoins after earnings miss

Analysts say Coinbase’s long-term growth may depend more on stablecoins and U.S. crypto legislation than a rebound in trading activity.

What to know:

• Coinbase’s weaker-than-expected first-quarter results and slowing trading activity have deepened a Wall Street split over whether its business is still overly tied to crypto’s boom-and-bust cycles.
• Several firms, including JPMorgan, Clear Street and Oppenheimer, remain positive on the stock, citing growth in stablecoins, derivatives, prediction markets and Coinbase’s broader “Everything Exchange” strategy, as well as potential tailwinds from pending U.S. crypto legislation.
• Skeptics such as Barclays and Compass Point argued that profitability is under pressure and user activity is weakening, contending that Coinbase remains heavily dependent on crypto cycles, with shares down 3.6 percent in pre-market trading.

Coinbase’s (COIN) weak first-quarter earnings report sparked another divide on Wall Street over whether the crypto platform is building a more durable business or remains tied to crypto’s boom-and-bust cycles.

Several analysts lowered forecasts after the company missed expectations on revenue and adjusted EBITDA as trading activity slowed across the crypto market. Still, a number of firms argued Coinbase’s expanding stablecoin and derivatives businesses — along with the possible passage of crypto legislation in Washington — could improve the company’s outlook later this year.

JPMorgan said the quarter reflected “a challenging environment” but added that Coinbase had “positioned the company well to operate in an increasingly digital world.”

The bank said pending U.S. crypto legislation “does set up for a better outlook into 2H26 and into 2027” and maintained an overweight rating on the stock.

The legislation in focus is the CLARITY Act, a proposed market structure bill that would establish rules for how crypto assets are regulated in the U.S. The bill aims to define which digital assets fall under the Securities and Exchange Commission (SEC) and which would be overseen by the Commodity Futures Trading Commission (CFTC). Coinbase and other crypto firms have argued clearer rules could encourage banks, asset managers and large companies to expand crypto activity.

Coinbase executives told analysts they expect a Senate Banking Committee markup this month, followed by a broader vote later in the summer.

Clear Street also pointed to regulation as a major catalyst.

“We see multiple catalysts ahead and remain constructive on the shares going into 2H26,” the firm wrote, even as it lowered its price target to $107 from $140 following weaker trading volume.

The firm highlighted growth in newer products including prediction markets, which generated more than $100 million in annualized revenue by March, and retail derivatives, which surpassed a $200 million annualized pace.

Oppenheimer said Coinbase’s push beyond spot crypto trading is beginning to show traction.

“Prediction Markets has emerged as one of the fastest growing new products,” the firm wrote, adding that the company’s “Everything Exchange strategy” could support long-term growth. The strategy includes stablecoins, derivatives, payments and tokenized assets alongside traditional crypto trading.

William Blair argued the first quarter may represent the low point of the current cycle.

“If Bitcoin BTC$79,876.65 has bottomed, as we suspect it has, April could be the trough spot volume month of the cycle,” the firm wrote.

The firm also pointed to growth in USDC stablecoin activity and Coinbase’s Base blockchain network as signs the company is becoming more embedded in crypto infrastructure beyond trading fees.

Not all analysts were convinced.

Barclays maintained an Underweight rating and warned that “profitability [is] under pressure” as trading activity continues to weaken. The bank said second-quarter transaction revenue trends remain well below Wall Street expectations.

Compass Point also kept a Sell rating, arguing Coinbase “remains entirely beholden to crypto cycles five years after going public.”

The firm said weaker monthly user activity raised questions about whether newer products are attracting new customers or simply replacing older trading businesses.

Shares of Coinbase are down 3.6% in pre-market trading.

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The data comes ahead of what's expected to be a new Federal Reserve chairman taking the reins at the U.S. central bank later this month.

Cosa sapere:

• The U.S. jobs report for April was stronger than expected.
• Bitcoin was holding at $80,200 in the minutes following the release.
• The news comes ahead of the confirmation of a new Fed chairman, Kevin Warsh, expected later this month.

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