Key Takeaways
- Coinbase experienced significant growth in 2024 and became the first crypto company to join the S&P 500 index.
- COIN stock was promoted to the S&P 500 index, the first debut on the main index for a crypto firm.
- The stock dropped by 50% in the first quarter, which aligned with the weak crypto market trend.
- However, Wall Street expects further growth for the crypto exchange’s shares.
Coinbase (COIN) is riding a wave of long-term optimism—despite a rocky second-quarter earnings report that fell short of Wall Street’s expectations.
While the crypto exchange posted a sharp rise in year-over-year profits, missing top-line estimates and slipping transaction volumes cast a shadow over the results.
The stock dipped following the report, even after a promising week, including a new partnership with JPMorgan and two major price target hikes from analysts.
Still, with subscription revenues growing and institutional interest rising, the big question now is: Where does Coinbase go from here, and what could its stock look like five years down the line?
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Is Coinbase Profitable?
Coinbase stock declined following its second-quarter earnings report.
It missed key expectations despite positive developments earlier in the week, including a new partnership with JPMorgan and two major price target hikes.
For the quarter, Coinbase (COIN) reported earnings of $5.14 per share, a sharp increase from $0.14 per share a year ago, with revenue rising slightly to $1.5 billion.
However, analysts had expected earnings of $1.25 per share on $1.59 billion in revenue. Adjusted earnings came in at just $0.12 per share, down significantly from $1.10 a year earlier.
Transaction revenue totaled $764 million, falling short of the $814 million consensus and declining from $781 million a year ago and $1.26 billion in the first quarter.
Retail transaction revenue dropped to $649.9 million, missing estimates of $710 million, while institutional transaction revenue fell to $60.8 million, below forecasts of $79 million.
Subscription and services revenue rose to $656 million but still missed the expected $708 million.
Stablecoin revenue grew to $332.5 million, also falling short of the $363 million estimate.
Total trading volume increased about 5% year-over-year to $237 billion but declined from $393 billion in Q1.
Looking ahead, Coinbase expects subscription and services revenue in the third quarter to range from $665 million to $745 million and anticipates July transaction revenue will reach approximately $360 million.
Deribit Acquisition
During the second quarter, Coinbase announced it had acquired Deribit, a leading crypto derivatives exchange, in a $2.9 billion cash-and-stock deal.
The acquisition briefly lifted Coinbase shares, which closed up 5.4% in regular trading. But that momentum faded after the earnings report, with the stock slipping 2.7% in after-hours trading.
In a letter to shareholders, Coinbase said the deal would make it “the premier global platform for crypto derivatives,” boosting both profitability and the durability of its trading business.
Spencer Yang, co-founder of Fractal Bitcoin and former Head of Product at Coinbase Wallet, told CCN the move is a major win.
“Deribit is the platform of choice for global traders for Bitcoin and Ethereum options.”
Yang noted that the acquisition gave Coinbase a global edge in the derivatives market and suggested that it could go further.
“I’d love to see Coinbase also offer Bitcoin options trading via broker-dealer on MSTR/IBIT to complement the custodial exchange Deribit acquisition, which is better for global growth,” Yang added.
COIN Stock Outlook for the Next Five Years
After the second-quarter report, analysts remain optimistic.
Citi noted that Coinbase’s momentum is “just getting started,” pointing to positive catalysts such as President Trump’s signing of the GENIUS Act, the House’s approval of the Clarity Act (pending Senate action), and Coinbase’s inclusion in the S&P 500.
The firm also sees further upside driven by Coinbase’s expansion in futures trading and its strong position in a more regulated crypto environment.
Over the past three months, 26 Wall Street analysts have issued 12-month price targets for Coinbase Global (COIN), with an average target of $383.29.
This represents a modest 1.5% upside from the stock’s most recent price of $377.48.
The price forecasts span a wide range, with a high estimate of $510.00 and a low of $205.00, reflecting continued uncertainty and volatility in the crypto sector.
Looking further ahead, long-term projections for 2030 suggest significantly greater upside.
Forecasts range from $139.02 to $496.10, with the average outlook pointing to a potential return on investment (ROI) of 31.33%.
These figures support a broadly bullish long-term sentiment, even as near-term expectations remain more measured.
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The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors.
Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
