Coinbase (COIN) is heading into its Q1 earnings report under mounting pressure, with several major Wall Street firms predicting a miss, driven by a significant slowdown in retail crypto trading—long the company’s primary revenue engine.
Barclays, JPMorgan, Compass Point, and Oppenheimer have all cut their first-quarter projections in recent weeks, citing reduced crypto volumes and softening market sentiment. According to FactSet, consensus estimates see Coinbase’s earnings per share (EPS) falling to $1.93, down from $2.26 in Q4. Revenue is expected to slide to $2.1 billion from $2.27 billion.
That’s a sharp year-over-year drop from Q1 2024, when EPS stood at $4.40, although revenue was then a lower $1.2 billion. Analysts now anticipate trading volume to come in around $403.8 billion, down from $439 billion last quarter.
Wall Street Turns Cautious
J.P. Morgan revised its EPS forecast down to $1.59, noting a 10% decline in Coinbase’s trading volume alongside a 17% drop in overall crypto market capitalization. However, the bank’s adjusted EPS estimate rises to $2.39 after factoring in crypto asset write-downs, thanks to Coinbase’s steady subscription revenue and tighter expense control.
Barclays took a more pessimistic stance, cutting both revenue and EBITDA projections. The firm sees retail trading volumes plunging to $69 billion—well below the Street’s $79.8 billion average estimate—despite growth in stablecoins.
Compass Point went even further, downgrading COIN to a “Sell” rating. The firm projects transaction revenue at just $1.24 billion, 7% below consensus, and warned that Coinbase is losing ground to decentralized exchanges (DEXs), which continue to pull in users seeking broader token access and lower fees. They also flagged potential pain extending into Q2.
Robinhood’s recent earnings didn’t help sentiment, either. The popular trading app posted a 13% quarter-over-quarter decline in transaction-based revenue, reflecting the broader market cooldown.
Bright Spot: Stablecoin Growth
Amid the bearish forecasts, stablecoins emerged as a rare bright spot. Coinbase benefited from a 42% surge in the market cap of USDC, the dollar-pegged stablecoin it helped develop. Barclays estimated that USDC-related revenue reached $304 million in Q1, helping to shore up Coinbase’s subscription revenue. Even Compass Point acknowledged the positive impact, which partially offset lower staking yields due to declining ether prices.
Oppenheimer, while also reducing its volume expectations to $380 billion from $440 billion, pointed out that Coinbase gained U.S. spot trading market share—an encouraging metric, albeit one that may not be enough if retail interest remains muted.
Bigger Concerns Loom
Longer term, analysts are increasingly concerned about structural shifts in the crypto trading landscape. DEXs, especially those built on fast, low-cost chains like Solana or even Coinbase’s own Base network, are becoming more attractive to retail traders. While Coinbase’s centralized, regulated model has advantages, its competitive edge may be eroding.
Looking ahead, a swift rebound in activity seems unlikely. Many retail traders remain sidelined after the early-year drawdown, with analysts suggesting it may take significant price gains—or the recouping of prior losses—to lure them back.
Coinbase shares have dropped 23% year-to-date, closing at $198.06. Bitcoin, by contrast, is up 3.8% since January, trading at $97,023.
