Coinbase’s (COIN) weak first-quarter earnings report sparked another split on Wall Street over whether the crypto platform is building a more durable business or remains tied to cryptocurrency boom and bust cycles.
Several analysts lowered their forecasts after the company missed expectations on revenue and adjusted EBITDA as trading activity slowed across the crypto market. Still, several companies argued that the expansion of Coinbase’s derivatives and stablecoin businesses, along with the possible passage of cryptocurrency 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 “well positioned the company to operate in an increasingly digital world.”
The bank said pending US crypto legislation “sets up a better outlook for the second half of 2026 and 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 US. The bill aims to define which digital assets are under the control of the Securities and Exchange Commission (SEC) and which would be overseen by the Commodity Futures Trading Commission (CFTC). Coinbase and other cryptocurrency companies have argued that clearer rules could encourage banks, asset managers and large companies to expand cryptocurrency activity.
Coinbase executives told analysts they expect a markup from the Senate Banking Committee this month, followed by a broader vote later in the summer.
Clear Street also pointed to regulation as an important catalyst.
“We see multiple catalysts ahead and remain constructive on the stock heading into the second half of 2026,” the company 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 in March, and retail derivatives, which surpassed an annualized pace of $200 million.
Oppenheimer said Coinbase’s push beyond spot cryptocurrency trading is starting to show traction.
“Prediction Markets has 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 may represent the lowest point of the current cycle.
“If Bitcoin “It has bottomed out, as we suspect, April could be the lowest volume month of the cycle,” the company wrote.
The firm also pointed to growth in USDC stablecoin activity and Coinbase’s Base blockchain network as signs that the company is becoming more 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 transaction revenue trends remain well below Wall Street expectations.
Compass Point also maintained a Sell rating, arguing that Coinbase “remains fully 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 commercial businesses.
Coinbase shares fell 3.6% in premarket trading.
