Wall Street Warns of Tough Quarter Ahead for Coinbase Amid Weak Retail Engagement

Coinbase (COIN) heads into its Q1 earnings report under a cloud, as a broad slowdown in crypto retail activity threatens to drag down performance in its core business lines. A chorus of Wall Street analysts—including Barclays, JPMorgan, Compass Point, and Oppenheimer—have already trimmed their expectations, warning of weaker trading volumes and declining revenue.

FactSet consensus sees Q1 earnings per share (EPS) dropping to $1.93 from $2.26 in Q4, and revenue dipping to $2.1 billion from $2.27 billion. Compared to the same quarter last year, EPS has more than halved from $4.40, although revenue has grown from $1.2 billion.

Trading volumes are projected to land at $403.8 billion, down from $439 billion in Q4.

Analysts Turn Bearish

JPMorgan now expects EPS at $1.59, attributing the decline to a 10% drop in trading activity and a 17% contraction in total crypto market cap. However, adjusted for crypto asset impairments, the bank estimates EPS at $2.39—helped by Coinbase’s tighter cost controls and growing subscription income.

Barclays, meanwhile, sharply reduced its revenue and EBITDA forecasts, noting that the market cooled off significantly after January despite expanding stablecoin usage. It estimates retail trading volume at just $69 billion—well below the consensus of $79.8 billion.

Compass Point took the most bearish stance, downgrading Coinbase stock to “Sell” and forecasting transaction revenue of $1.24 billion—7% below street expectations. The firm flagged Coinbase’s loss of retail share to decentralized exchanges (DEXs) and warned of further erosion in Q2.

Robinhood’s recent earnings underscored the broader trend, showing a 13% quarterly drop in transaction-based revenue.

A Silver Lining in Stablecoins

One area that held up: USDC revenue. Coinbase earned a windfall from the stablecoin’s 42% surge in market cap, boosting its subscription business. Barclays estimates $304 million in USDC-related revenue, while Compass Point admitted the stablecoin inflow helped soften the blow from falling ETH staking returns.

Oppenheimer lowered its volume forecast to $380 billion but acknowledged Coinbase’s rising U.S. spot market share. Still, the firm warned that this may offer limited upside if retail participation doesn’t rebound.

Long-Term Headwinds

Looking ahead, analysts are cautious. DEXs—especially those on Solana and Coinbase’s own Base—are drawing more attention from retail users eager to access niche tokens and lower fees. Though Coinbase remains a dominant U.S. exchange, its centralized model could face growing pressure.

Until retail sentiment shifts or crypto markets rebound decisively, Coinbase may find itself stuck in neutral. Its stock has slid 23% year-to-date, closing Tuesday at $198.06, even as bitcoin rose 3.8% over the same period to $97,023.