Coinbase will announce its financial performance for the second quarter on Thursday evening. However, experts believe what company leaders say about future prospects and changes in regulations will be more important than the actual numbers reported.
Most experts agree that crypto trading faced challenges in the second quarter. Trading activity decreased overall, as investors were hesitant. Both Bitcoin and Ether saw lower average prices compared to the first quarter, and fewer individual investors participated in the market. Throughout much of the quarter, crypto prices were down, with Bitcoin falling around 14% and Ether dropping about 25%. Although June showed a slight recovery, it wasn’t enough to make up for the weaker performance in April and May.
As a crypto investor, what I’m really watching with Coinbase isn’t *if* things slow down – we all know volumes are cyclical – but *how much* that slowdown impacts their bottom line. More importantly, I want to see how fast their newer ventures can start contributing and lessen their reliance on just trading fees. That’s the key to their long-term success, in my opinion.
Trading slowed sharply
As a researcher following the financial sector, I’ve noticed several firms – Barclays, Benchmark, Clear Street, and Compass Point – have recently lowered their earnings expectations. They’ve all pointed to a decrease in day-to-day trading volume as the primary reason for these adjustments.
As a researcher following Coinbase, I’ve been analyzing their recent performance. My estimates, based on data from Barclays analyst Benjamin Budish, suggest that Coinbase processed around $152 billion in trades last quarter. This is noticeably lower than what analysts generally expected – the Street was anticipating closer to $178 billion. Consequently, I project their adjusted EBITDA will likely be about 3% below current consensus forecasts, primarily due to declines in revenue from blockchain rewards and institutional trading.
I’ve revised my forecasts for Clear Street following some soft retail numbers. I now anticipate around $160 billion in trading volume, which should translate to approximately $301 million in adjusted EBITDA.
Mark Palmer at Benchmark also lowered his estimate for earnings before interest, taxes, depreciation, and amortization (EBITDA) to $377 million. Meanwhile, Compass Point anticipates revenue will fall a bit short of what analysts predict, but they expect EBITDA to be close to expectations.
Coinbase’s performance is still closely tied to how much buying and selling of cryptocurrencies is happening, a trend that’s been especially clear recently. While the company is working to expand its income with things like stablecoins, derivatives, payments, tokenization, and its Base blockchain, these new areas are still much smaller contributors to revenue compared to regular transaction fees.
Subscription stability
One area where analysts are more constructive is subscription and services revenue.
As a crypto investor, I’m paying attention to Coinbase’s other income sources – things like interest earned from USDC, rewards for staking my coins, fees for their custody services, and subscriptions like Coinbase One. What’s interesting is that these areas aren’t as reliant on how much people are actively trading each day. Analysts think this will help protect Coinbase’s overall revenue if trading slows down, acting as a kind of financial safety net.
As a crypto investor, I’m seeing mixed signals about Coinbase’s future revenue. Benchmark thinks their subscription services will help stabilize things, but Barclays is predicting revenue on the lower side – basically, they expect softer crypto prices to hurt and aren’t anticipating huge growth in USDC. Compass Point is even more cautious; they think Coinbase might miss its revenue goals altogether if crypto stays down and stablecoin adoption doesn’t pick up much.
Prediction markets
Even though second-quarter earnings might not be great, experts are particularly interested in what company leaders say about their latest products.
Coinbase is seeing rapid growth in its prediction markets, especially with more people using them for sports. Analysts at Barclays think these markets are starting to become a significant source of revenue, and Clear Street believes they’ll be key to Coinbase’s future growth.
There’s some debate about how profitable Coinbase actually is. Compass Point believes investors might be too optimistic because Coinbase reports total revenue before factoring in payments to Kalshi, which ultimately reduces its actual earnings.
Derivatives are also a key focus for Coinbase. Through its international perpetual futures business and the purchase of Deribit, Coinbase can reach a significantly larger global audience than just those trading with current prices (spot trading). While analysts believe derivatives offer strong potential for future growth, they haven’t yet made up for lower spot trading volumes in the second quarter.
Regulatory questions
Perhaps the biggest debate isn’t about the quarter itself but about Washington.
Investors are closely watching the Clarity Act, a proposed law that would create rules for digital assets in the United States.
Benchmark thinks recent progress on ethics rules significantly increases the chances of the bill passing the Senate, potentially giving Coinbase’s stock a major boost. However, Barclays is taking a more conservative approach, pointing out that the Senate’s schedule is crowded and other issues could still cause delays.
Compass Point is the most concerned, believing the Senate doesn’t have much time to act before its summer break. They also suggest Coinbase’s stock price might fall if the proposed laws aren’t passed quickly.
The earnings numbers themselves may ultimately be backward-looking.
Investors will be paying close attention to what Coinbase’s management says about the third quarter, any news about job cuts or cost-saving measures, developments in their work with financial derivatives and prediction markets, and signs that the company is becoming less dependent on the ups and downs of cryptocurrency trading.
The biggest question for investors right now is whether Coinbase can maintain its growth. Those optimistic about the company believe it’s successfully creating diverse and reliable income sources, which will help stabilize its earnings. However, those who are pessimistic argue that Coinbase still largely relies on individual investors trading cryptocurrency, and recent results are expected to confirm this.
COIN shares traded around 1.7% lower at $165 as of writing on Wednesday.
2026-07-29 18:26