Coinbase’s (COIN) weak first-quarter earnings report sparked another divide on Wall Street over whether the cryptocurrency platform is building a more durable business or remains tied to cryptocurrency’s boom and bust cycles.
The company missed revenue estimates and revised EBITDA, with several analysts lowering their forecasts as trading activity in the cryptocurrency market slowed. Still, many firms believe Coinbase’s expanding stablecoin and derivatives business — as well as potential crypto legislation passed in Washington — could improve the company’s prospects later this year.
JPMorgan said the quarter reflected a “challenging environment,” but added that Coinbase “positions the company well in an increasingly digital world.”
The bank said pending U.S. cryptocurrency legislation “does set the stage for better prospects in the second half of 2026 and 2027,” and maintained an overweight rating on the stock.
The key piece of legislation is the CLARIFICATION Act, a proposed market structure bill that would set rules for how crypto assets are regulated in the United States. The bill aims to define which digital assets fall under the jurisdiction of the U.S. Securities and Exchange Commission (SEC) and which will be regulated by the Commodity Futures Trading Commission (CFTC). Coinbase and other cryptocurrency companies believe clearer rules could encourage banks, asset managers and large corporations to expand cryptocurrency activity.
Coinbase executives told analysts they expect the Senate Banking Committee to raise the price 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 stock heading into the second half of 2026,” the firm wrote, although it lowered its price target to $107 from $140 due to weaker trading volumes.
The company highlighted growth in new products, including prediction markets (annualized revenue exceeded $100 million as of March) and retail derivatives (annualized revenue exceeded $200 million).
Oppenheimer said Coinbase’s efforts to move beyond spot cryptocurrency trading are 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 as well as traditional cryptocurrency trading.
William Blair believes the first quarter may represent the low point of the current cycle.
“If Bitcoin As we suspected, April may be the trough month for spot volumes in the cycle,” the firm wrote.
The company also noted that growth in USDC stablecoin activity and Coinbase’s Base blockchain network indicate that the company is becoming more deeply integrated into crypto infrastructure beyond transaction fees.
Not all analysts are convinced.
Barclays maintains underweight rating, warns ‘profitability [is] “Under pressure” as trading activity continues to be weak. 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 captive to the cryptocurrency cycle five years after going public.”
The company said weak monthly user activity raised questions about whether the new products were attracting new customers or simply replacing older trading operations.
Coinbase shares fell 3.6% in pre-market trading.