Coinbase Braces for Earnings Hit as Retail Traders Flee—Wall Street Sounds Alarm
Retail crypto volumes crater—just as the suits predicted. Coinbase’s Q2 report could sting.
Main Street’s love affair with crypto cools: Trading activity nosedives 40% from last quarter’s highs. Analysts slash revenue targets, citing ’unsustainable’ retail euphoria.
The kicker? Institutional flows can’t plug the gap. Pro traders are hedging, not FOMO-ing—leaving exchanges scrambling for yield.
Bonus cynicism: Nothing unites Wall Street like schadenfreude over disrupted disruptors.
Stablecoins to the rescue?
The one area of optimism: stablecoins.
Coinbase’s revenue from USDC surged as the stablecoin’s market cap climbed 42% during the quarter, helping bolster subscription revenue. Barclays estimates $304 million in first-quarter USDC-related revenue, and even the skeptics at Compass Point acknowledge this helped offset falling staking income due to the slide in ether’s price.
Oppenheimer cut its volume forecast to $380 billion from $440 billion, but noted that Coinbase gained U.S. spot trading market share. That’s a positive sign, but one that may not matter if retail traders keep sitting on their hands.
There’s also growing concern about longer-term competitive pressures. Analysts noted that decentralized exchanges — especially those operating on faster and cheaper blockchains like Solana and Coinbase’s own Base — are drawing in retail users looking to trade a wider array of tokens. While Coinbase’s U.S. market share is up, its dominance as a centralized, regulated exchange may not be enough to fend off this shift.
Looking ahead, analysts caution that a near-term rebound in trading may be slow to materialize, especially with retail traders often hesitant to re-enter the market until they recoup earlier losses.
Shares of Coinbase are down 23% year-to-date, trading at $198.06, while Bitcoin is up 3.8% since the beginning of the year at $97,023
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