COIN’s stock fell in overnight trade as the cryptocurrency market experienced a notable decline, compounded by a discouraging investor note from Monness Crespi, which suggested that investors should consider shorting shares of Coinbase. This combination of market activity and external advisories has left investors grappling with the future outlook for Coinbase amidst shifting regulatory landscapes and fluctuating market sentiment.
- Bloomberg Intelligence estimated that Coinbase’s stablecoin revenue could increase two to seven times if adoption accelerates and legislation remains favorable.
- Stablecoin revenue accounted for approximately 19% of Coinbase’s total revenue in 2025, largely driven by its revenue-sharing agreement with Circle on USDC reserves.
- Wall Street is concerned that if Washington restricts exchanges from offering stablecoin rewards, it could potentially impact Coinbase’s business model.
- However, CEO Brian Armstrong has contended that a ban on stablecoin yields could actually be a more profitable move for the company.
Recently, despite optimistic projections from Bloomberg Intelligence estimating that Coinbase’s stablecoin revenue could surge significantly, COIN shares saw a decline. The stock dropped approximately 1.88% in overnight trade after plummeting 6.48% during the regular session, bringing its year-to-date losses to nearly 30%. Retail sentiment surrounding COIN on Stocktwits remained predominantly bearish, signaling a lack of confidence among individual investors.
Coinbase Stablecoin Growth Hinges On Regulatory Clarity
According to estimates from Bloomberg Intelligence, Coinbase generated around $1.35 billion in stablecoin revenue in 2025, which comprised approximately 19% of the company’s total earnings for that year. Notably, a significant portion of this revenue stemmed from Coinbase’s 50% income-sharing arrangement with Circle (CRCL) regarding USDC reserves.
Bloomberg reported that Coinbase’s stablecoin income could potentially expand two to seven times if adoption accelerates under favorable legislation, particularly referencing the GENIUS Act. However, the current negotiations over a comprehensive market structure bill in Washington pose a threat, as they could prevent crypto exchanges like Coinbase from offering rewards tied to stablecoin investments. Such restrictions would likely impact Coinbase’s crucial revenue-sharing deal with Circle, a catalyst for its financial success.
Analyst Paul Gulberg emphasized that Coinbase’s quest for substantial growth in stablecoin revenue depends heavily on regulatory outcomes. “They would need favorable details of the eventual crypto bill,” he noted, indicating that clarity on this issue is vital for the company to realize its growth projections.
Wall Street Signals More Downside Risk
On Wall Street, perspectives on Coinbase’s future remain divided. Some analysts, like Gus Gala from Monness Crespi, express skepticism regarding the potential for the CLARITY Act to pass. In a recent investor note, Gala asserted that the market has assigned an overly optimistic probability to the bill’s approval, particularly with respect to stablecoin loopholes that investors hoped would remain open.
Following the day’s trading, COIN’s shares continued to suffer. Gala advised investors to short the stock, anticipating further declines. She attributed Monday’s drop in Coinbase shares to various macroeconomic factors, including President Donald Trump’s tariff policies, ongoing outflows from exchange-traded funds (ETFs), and signs indicating that large investors (often called “whales”) were moving HODLs (long-term holdings) back onto exchanges. Monness Crespi reiterated a ‘Sell’ rating on COIN, setting a price target of $120, suggesting a potential downside of roughly 25% from the stock’s closing price.
Additionally, on Friday, Baird analyst Robert Bamberger revised his price target for Coinbase downward, reducing it from $240 to $165 while maintaining a ‘Neutral’ stance, further illustrating Wall Street’s caution regarding COIN’s projected performance.
Coinbase CEO Sees Upside Even Without Stablecoin Rewards
In a counterview to the prevailing concerns, Coinbase CEO Brian Armstrong argued that the company could find pathways to greater profitability even if it were banned from offering yields on stablecoins. During the latest earnings call, he stated, “It would actually make us more profitable because we would just continue to receive the economics from Circle.” Currently, a substantial portion of the stablecoin earnings is distributed to customers; if that were to change, Coinbase could potentially retain a larger share, improving its bottom line.
The dynamics in the cryptocurrency market are also contributing to COIN’s challenges. An AI-driven sell-off has affected various stocks, and the overall cryptocurrency market witnessed a 2.4% drop to $2.25 trillion, with Bitcoin (BTC) experiencing a 3.3% decline, falling below $63,000. Liquidations in the crypto space reached alarming levels, totaling $380 million in just 24 hours, and a significant portion of that—nearly $290 million—stemmed from liquidations of long positions.
For more detailed insights, check out: Bitcoin’s Price Drops Below $63K After IBM’s Worst Day In 25 Years – Triggers $370 Million Liquidation Wave
