Wall Street Split on Trading Slump vs. Services Growth

Coinbase (COIN) will report second-quarter earnings after Thursday’s market close and expectations are diverging sharply on Wall Street as analysts weigh falling trading volumes against a wave of regulatory developments and product rollouts.

FactSet consensus estimates peg the company’s revenue at $1.59 billion in the second quarter, up from $1.45 billion in the same period last year. Earnings per share are expected to come in at $1.25. Below the surface of those topline numbers, however, lies a debate over what matters more right now: declining crypto spot volumes or Coinbase’s growing subscription and services (S&S) business, fueled by higher interest income and blockchain activity.

Barclays analyst Benjamin Buddish — who has a neutral rating on COIN — is bracing for disappointment. Buddish warned that retail trading activity fell sharply and estimates Coinbase’s transaction revenue at around $741 million — below FactSet’s forecast of $813.8 million. He cited a 43% quarter-over-quarter drop in retail volumes based on data from Robinhood and app usage, along with softening across centralized exchanges.

“For Q2, we believe the correlation derived from Robinhood trading metrics is a better read-through for Coinbase Q2 retail trading revenues. Robinhood’s retail crypto volumes were down meaningfully q/q,” Buddish wrote.

Despite this, Buddish recently raised his price target to $359 from $202, reflecting an increased earnings multiple amid a broader market re-rating, not to mention the stock’s more than doubling from the April lows to the current $380. He is keeping his neutral rating as he believes short-term headwinds are balanced by optimism around pending crypto legislation like the GENIUS and CLARITY Acts.

Citi analyst Peter Christiansen is more upbeat. He recently lifted his price target to $505 from $270 and reaffirmed a buy rating. Christiansen pointed to Coinbase’s inclusion in the S&P 500, the signing of the GENIUS Act on stablecoins, and progress on the CLARITY Act, which aims to create a framework for distinguishing digital commodities from securities.

“Investors are beginning to place a premium on blockchain innovations applicable for real-world activities,” Christiansen wrote, highlighting Coinbase’s plans for tokenized equities and new payment tools. While he acknowledged lower Q2 volumes, he sees long-term upside from increased monetization of USDC, Base network usage, and future growth in Coinbase One subscriptions.

JPMorgan’s Kenneth Worthington took a more reserved position, maintaining a neutral rating and a $404 price target for year-end 2025. His valuation includes Coinbase’s share of Circle’s stablecoin business, worth an estimated $1.4 billion, which he stripped out of adjusted EBITDA. He also factored in $50 million in costs tied to a cybersecurity breach earlier this year.

Worthington believes Coinbase remains a “beneficiary of the cryptocurrency economy” and says that “we previously underestimated the strength of the U.S. spot Bitcoin ETPs in its early days as a key catalyst for the crypto industry.” Nevertheless, he cautions that its long-term success will hinge on product development, especially in tokenization and payments. He sees potential upside if ETF inflows and legislative clarity continue, but warns that Coinbase could underperform if enthusiasm around crypto retreats or if new rules impose higher compliance costs.

In the background of these debates is the performance of Coinbase’s S&S business, which management had guided to generate between $600 million and $680 million for the quarter. Barclays expects the figure to top guidance at $703 million, driven by higher USDC balances and elevated BTC prices during Q2. Christiansen at Citi sees slower growth in staking but also expects new features, such as a refreshed wallet and the launch of a crypto-powered credit card on the Amex network, to support S&S growth over time.

Coinbase’s core challenge is that while crypto prices have rebounded in 2025, trading volumes have not kept pace. According to The Block, Coinbase processed $232 billion in spot volume during Q2, down roughly 40% quarter-over-quarter. Futures trading was stronger, but still showed signs of tapering by June.

Coinbase stock is currently trading at $380, up about 2% on Wednesday and 47% year-to-date.