Bernstein said Coinbase (COIN) is beginning to show signs that its push to become an "everything exchange" is working, despite the company reporting weaker-than-expected first-quarter results on Thursday.
In a note to clients on Friday, the research and brokerage firm's analysts, led by Gautam Chhugani, maintained an outperform rating and $330 price target on Coinbase stock following earnings, implying 71% upside potential from Thursday's closing price of 192.96, according to The Block's COIN price page.
Coinbase's revenue for the quarter came in at $1.41 billion, missing estimates by 5%, while adjusted EBITDA of $303 million fell 26% short of expectations. The company also posted a net loss of $394.1 million, reflecting $482 million in unrealized losses tied to its crypto investment portfolio. Bernstein said weaker crypto markets weighed on both trading activity and subscription revenue, with total crypto market capitalization and industry trading volumes both down more than 20% from the prior quarter.
Coinbase's total spot trading volume dropped 25% quarter-over-quarter to $202 billion in the first quarter. Retail trading volume fell 36% to $36 billion, while monthly transacting users declined 10% to 8.2 million. Nevertheless, Bernstein noted that Coinbase reached an all-time high in crypto trading market share, supported by gains in both spot and derivatives trading.
Derivatives, prediction markets and payments expand
Bernstein pointed to a growing contribution from newer businesses outside Coinbase's core spot trading operations as catalysts for upside. Retail derivatives are now annualizing more than $200 million in revenue, according to the firm, while institutional derivatives tied to the company's Deribit acquisition are annualizing above $250 million. Meanwhile, prediction markets surpassed a $100 million annualized revenue run rate in March and became one of the fastest-growing products in Coinbase's history, the analysts said.
The report also highlighted Coinbase's efforts to build out stablecoin and payments infrastructure around USDC and Base. Bernstein said Base-based stablecoin transaction volume grew tenfold year-over-year, while more than 90% of agentic stablecoin transaction volume during the quarter occurred on the Ethereum Layer 2 network. The analysts described Coinbase's strategy as a vertically integrated stack built around USDC, Base, payments APIs, and the x402 protocol for agentic commerce.
Additionally, Bernstein argued the market may still be underestimating potential catalysts ahead for Coinbase and the broader crypto sector, pointing to expected progress on the Clarity Act and recent comments from White House crypto officials regarding a more formal announcement tied to a Strategic Bitcoin Reserve.
Earlier on Friday, Coinbase resumed trading after suspending order matching and moving markets into "Cancel Only" and auction modes for several hours during an AWS-related disruption.
COIN is currently down 2.7% in pre-market trading on Friday.
Gautam Chhugani maintains long positions in various cryptocurrencies. Certain affiliates of Bernstein act as market makers or liquidity providers in the equity securities of Coinbase.