Major investment firms are downgrading cryptocurrency platforms like Coinbase, citing a sharp decline in trading activity and falling token prices that threaten first-quarter earnings. Barclays and Oppenheimer research indicates a sector-wide slowdown, with trading volumes dropping significantly. Barclays noted Coinbase's March trading volume was the lowest since September 2024, estimating a 30% drop for the first quarter. This directly impacts revenue, as transaction fees are the primary income source for most crypto exchanges.
Cryptocurrency prices also saw a substantial pullback in the first quarter, with Bitcoin down over 22% and Ether down 29%. Oppenheimer, while more optimistic on Coinbase, acknowledged the need to cut forecasts due to lower prices and trading activity, exacerbated by economic uncertainty.
Analysts are revising models downward across the industry to reflect a quieter market. While some platforms are exploring revenue diversification, these efforts may take time to offset the current downturn. Even stablecoin revenue streams face regulatory uncertainty, though new use cases offer some support. The overarching trend is a preemptive adjustment by firms lowering estimates ahead of earnings season.
Coinbase is set to report second-quarter earnings on May 7, and Bullish on April 23. Circle has not yet announced a date.