Investing.com — Barclays downgraded Coinbase shares to Underweight from Equal Weight, warning that weakening crypto trading volumes are squeezing the exchange’s profitability and that the stock offers little valuation support at current levels.
The bank trimmed its price target to $140 from $148.
Barclays said its adjusted EBITDA estimate for the first quarter came in roughly 24% below Wall Street consensus, driven primarily by lower spot trading activity — particularly on the retail side — with read-throughs from Robinhood’s volume data pointing to a sharp sequential decline.
“Despite a pro-crypto President and a favorable regulatory environment, global crypto trading activity has declined to a level not seen since the end of 2023,” analyst Benjamin Budish wrote, adding that March was the lowest volume month for Coinbase since September 2024, with April showing no signs of improvement.
Coinbase exchange spot volume came in at roughly $189 billion in the first quarter, according to The Block, down 30% from the prior quarter, while global crypto exchange volumes fell 34% over the same period.
Barclays modeled total Q1 volumes of approximately $196 billion and projected transaction revenues of $678 million, well below the Street estimate of $876 million. Retail transaction revenues were modeled at $490 million, versus consensus of $651 million.
“While there are many strategic initiatives ongoing at Coinbase, we expect the decline in volumes will weigh on profitability, and with little valuation support we move shares to Underweight,” Budish wrote.
Beyond near-term volume weakness, the analyst also raised broader strategic concerns. He said he sees little competitive advantage in Coinbase’s push to become an “everything exchange,” pointing to equities trading as already a very low-margin business, and prediction markets as a space rapidly being captured by newer entrants like Kalshi and Polymarket.
On stablecoins, Budish said the outcome of ongoing CLARITY Act negotiations appears likely to favor banks over crypto-native platforms. While eliminating stablecoin rewards would actually be a near-term positive for Coinbase, the analyst flagged that such rewards are a key incentive for retail adoption, making their removal a headwind to longer-term user growth rather than an immediate revenue hit.
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