Barclays has moved to an Underweight rating on Coinbase shares, reducing its view from Equal Weight and trimming the price objective to $140 from $148. The bank said trading volumes in the crypto market have weakened to a degree that is pressuring the exchange's profitability and providing scant valuation support for the stock at current levels.
In its analysis, Barclays estimated that adjusted EBITDA for Coinbase in the first quarter was roughly 24% below the Wall Street consensus. The shortfall was attributed primarily to lower spot trading activity, especially among retail customers. Barclays noted that read-throughs from Robinhood's volume data pointed to a sharp sequential decline in retail activity.
"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. Budish added that March represented the lowest volume month for Coinbase since September 2024, and that April showed no sign of improvement.
Data cited by Barclays included The Block's estimate that Coinbase exchange spot volume was roughly $189 billion in the first quarter, down about 30% from the prior quarter. Barclays noted that global crypto exchange volumes fell 34% over the same period.
Barclays modeled total Q1 volumes for Coinbase of approximately $196 billion and projected transaction revenues of $678 million, considerably below the Street estimate of $876 million. The bank's model put retail transaction revenues at $490 million versus a consensus figure of $651 million.
Budish wrote that while Coinbase has a number of strategic initiatives underway, the decline in volumes is expected to weigh on profitability. He said the combination of volume weakness and limited valuation support led Barclays to lower its recommendation to Underweight.
Beyond the immediate volume downturn, the analyst raised broader strategic questions about Coinbase's competitive position. He said he sees little advantage in Coinbase's effort to become an "everything exchange," pointing out that equities trading is already a very low-margin business. He also observed that prediction markets appear to be rapidly being captured by newer entrants such as Kalshi and Polymarket.
On the stablecoin front, Budish commented that the likely outcome of ongoing CLARITY Act negotiations appears to favor banks over crypto-native platforms. He noted that while eliminating stablecoin rewards would be a near-term positive for Coinbase from a revenue perspective, such rewards are an important incentive for retail adoption. Their removal, he warned, would represent a headwind to longer-term user growth rather than an immediate revenue shock.
Contextual note: The analysis above reflects Barclays' published estimates and commentary as described. It focuses on volume-driven revenue impacts, modeled transaction revenue figures, strategic positioning concerns, and regulatory uncertainty related to stablecoins.