Q2 Disappointment Doesn’t Signal Trouble Ahead for Coinbase, Benchmark Asserts

Benchmark Calls Coinbase Stock Drop a Temporary Setback, Reaffirms Bullish Outlook

Wall Street firm Benchmark remains optimistic on Coinbase (COIN), despite a sharp decline in the stock following the company’s second-quarter earnings miss.

Shares of the Nasdaq-listed crypto exchange slid 16.7% on Friday after posting weaker-than-expected results. However, Benchmark analyst Mark Palmer reiterated a Buy rating and maintained a $421 price target, calling the pullback a “buying opportunity” rather than a cause for concern.

“Coinbase continues to build the infrastructure essential for the crypto economy,” Palmer wrote, noting that the long-term thesis remains intact.

The firm highlighted five key drivers behind its bullish stance:

1. USDC Revenue Advantage: Coinbase’s revenue-sharing deal with Circle on USDC reserves could generate steady returns as stablecoin usage accelerates, particularly under the newly passed GENIUS Act.
2. Strengthening Institutional Presence: Prime brokerage services, crypto-as-a-service, and derivatives offerings are gaining traction—especially with the potential boost from regulatory clarity via the CLARITY Act.
3. “Super App” Development: Coinbase is building a comprehensive crypto app that will combine trading, payments, NFTs, DeFi, and developer tools into a unified experience, positioning it as a unique player in the U.S. market.
4. DeFi Integration: By incorporating decentralized exchange (DEX) access, Coinbase expands its token offerings beyond centralized listings, increasing its appeal to advanced users.
5. Recovery in Trading Activity: July transaction revenue is estimated at $360 million, a 44% increase over Q2’s monthly average—signaling a rebound in user engagement and trading volumes.

Despite the Q2 miss, Benchmark sees the weakness as short-term noise. Palmer noted that Coinbase is benefiting from favorable policy developments and growing institutional interest—both of which could support strong long-term growth.