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.
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.
