Coinbase outlook hinges on stablecoins and U.S. crypto legislation after earnings miss

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Coinbase outlook and legislation

Highlights

Coinbase missed revenue and adjusted EBITDA expectations, leading several brokerages to cut forecasts and Clear Street to lower its price target to $107 from $140.
Pending U.S. crypto legislation such as the CLARITY Act is seen as a key catalyst, with Senate Banking Committee markup expected this month and a broader vote later in the summer.
While new products like prediction markets generated over $100 million annualized revenue by March, Coinbase shares fell 3.6% pre-market amid concerns that diversification may not offset weak trading volumes.

Analysts weigh regulation and product expansion

As reported by CoinDesk, several brokerages cut forecasts after Coinbase missed expectations on revenue and adjusted EBITDA, but some still argue the company is better positioned for later in 2026 if Washington advances crypto market rules and newer business lines keep scaling.

JPMorgan describes the quarter as a challenging environment and says pending U.S. crypto legislation could support a better outlook into the second half of 2026 and into 2027. The bank keeps an overweight rating, while Coinbase executives tell analysts they expect a Senate Banking Committee markup this month, followed by a broader vote later in the summer.

The proposed CLARITY Act is central to that view because it would set rules for how crypto assets are regulated in the U.S., including whether oversight falls to the SEC or the CFTC. Coinbase and other crypto firms argue clearer rules could encourage banks, asset managers and large companies to expand crypto activity.

Clear Street also cites regulation as a major catalyst even as it cuts its price target to $107 from $140 after weaker trading volumes. The firm says newer products are gaining traction, highlighting prediction markets with more than $100 million in annualized revenue by March and retail derivatives with an annualized run rate above $200 million.

Oppenheimer says Coinbase’s strategy of expanding beyond spot crypto trading is starting to show results. It points to prediction markets as one of the fastest-growing new offerings and says the company’s broader "Everything Exchange" approach, spanning stablecoins, derivatives, payments and tokenized assets, could support long-term growth.

Trading weakness keeps pressure on the shares

Not all analysts are convinced that diversification is enough to offset the current slowdown in transaction activity. Barclays keeps an Underweight rating and warns profitability remains under pressure as second-quarter transaction revenue trends stay well below Wall Street expectations.

Compass Point also maintains a Sell rating, arguing Coinbase is still heavily tied to crypto market cycles five years after its listing. The firm says weaker monthly user activity raises questions about whether new products are bringing in fresh customers or mainly replacing older trading businesses.

William Blair takes a more constructive view, arguing the first quarter may mark the low point of the current cycle if Bitcoin has already bottomed and April proves to be the trough month for spot trading volume. It also points to rising USDC activity and growth in Coinbase’s Base blockchain network as evidence that the company is becoming more embedded in crypto infrastructure beyond trading fees.

Coinbase shares are down 3.6% in pre-market trading, reflecting investor caution over whether regulatory tailwinds and product expansion can arrive quickly enough to counter weaker trading demand.

We previously reported on momentum in Washington around a new U.S. crypto market structure law and related stablecoin provisions, including a compromise over when third-party platforms could offer yield on stablecoins. That piece outlined the expected Senate Banking Committee markup timeline and how the bill could advance to a full Senate vote and potentially the White House, underscoring why clearer rules matter for adoption and product expansion.

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