Coinbase stock dropped 30% following a 34% earnings estimate cut by William Blair, but analysts remain bullish on the company.
Macro & Markets ·
Coinbase stock fell nearly 30% this year, yet William Blair maintained an outperform rating while cutting the exchange's 2026 and 2027 earnings estimates by 34% and reducing revenue forecasts by 12–13%. The investment bank's analysis suggested key downside risks are already reflected in the share price, with both Coinbase and Circle rising roughly 3–4% on Wednesday following the note. William Blair expects Coinbase's trading volume to decline approximately 44% in 2026 before rebounding more than 32% in 2027, citing structural differences from the prior cycle including spot Bitcoin ETFs, institutional adoption, and a more mature regulatory environment.
The firm's outlook hinges on a recovery thesis centered on near-term cyclical compression in crypto markets. Analysts flagged Base, Coinbase's layer-2 network, as a potential major earnings driver alongside retail derivatives and prediction markets, which crossed $200 million annualized in the first quarter. Meanwhile, technical analysts have identified bullish chart patterns: John Bollinger, creator of the Bollinger Bands volatility indicator, identified a "W" double-bottom formation on Bitcoin's daily chart beginning in early July, characterizing it as a potential confirmation of trend reversal.
Not all near-term outlooks were equally constructive. Piper Sandler cut its Coinbase price target to $155 from $170 while keeping a neutral rating, highlighting prediction markets and perpetual futures as key watch points for the second half of the year. What remains unresolved is whether the compression in trading activity and earnings projected for 2026 will materialize as expected, and whether Base and derivatives revenue can offset the decline in spot trading.