Coinbase’s (COIN) weak first-quarter earnings report has sparked another division on Wall Street over whether the crypto platform is building a more sustainable business or remains tied to crypto’s boom-and-bust cycles.
Several analysts lowered their forecasts after the company missed revenue and adjusted EBITDA expectations as trading activity slowed in the crypto market. Still, a number of firms have argued that the expansion of Coinbase’s stablecoin and derivatives business — as well as the possible passage of crypto legislation in Washington — could improve the company’s prospects 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 US crypto legislation “opens better prospects in 2H26 and 2027” and maintained an overweight on the stock.
The legislation in question is the CLARITY Act, a market structure bill that would establish rules for how crypto assets are regulated in the United States. The bill aims to define which digital assets fall under the purview of the Securities and Exchange Commission (SEC) and which would be overseen by the Commodity Futures Trading Commission (CFTC). Coinbase and other crypto companies have argued that clearer rules could encourage banks, asset managers and large corporations to expand their crypto businesses.
Coinbase executives told analysts they expected a raise from the Senate Banking Committee this month, followed by a broader vote later in the summer.
Clear Street also highlighted regulation as a major enabler.
“We see several catalysts ahead and remain constructive on the stock during 2H26,” the company wrote, although it lowered its price target from $140 to $107 following lower trading volume.
The company highlighted growth in new products, including prediction markets, which generated more than $100 million in annualized revenue in March, and retail derivatives, which surpassed the $200 million annualized pace.
Oppenheimer said Coinbase’s push beyond spot crypto trading is starting to show traction.
“Prediction markets have become one of the fastest growing new products,” the company 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 that the first quarter could represent the low point of the current cycle.
“If Bitcoin has bottomed out, as we suspect, April could be the bottom month of the cycle in terms of volume,” the company wrote.
The company also highlighted the growth of USDC’s stablecoin business and Coinbase’s core blockchain network, a sign that the company is increasingly integrated into 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 trading revenue trends remained well below Wall Street expectations.
Compass Point also maintained a Sell rating, arguing that Coinbase “remains fully beholden to crypto cycles five years after its IPO.”
The company said the drop in monthly user activity raised questions about whether the new products were attracting new customers or simply replacing old business activity.
Shares of Coinbase are down 3.6% in premarket trading.
