Coinbase Global (COIN) is down about 30% from its 52-week high of ~$445, with the market fretting over a big miss in its Q2 revenues and a costly data breach. Yet, the company notched some impressive wins, such as growing stablecoin revenue and its derivatives business.
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With crypto adoption surging, especially among institutions, and Bitcoin and Ethereum hovering near record highs, Coinbase’s momentum looks strong. The valuation today isn’t crazy either. Thus, I’m still Bullish on COIN stock.
Headwinds Hitting Coinbase Hard
To be fair, the market wasn’t thrilled with Coinbase’s latest results, and it’s easy to see why. The company reported EPS of $5.14, seemingly beating market expectations of $1.25.
However, COIN’s adjusted EPS was actually $0.12 — down a breathtaking 89% year-over-year, while revenue of $1.5 billion missed forecasts by about $97 million. Trading volumes tanked, with consumer spot trading down 45% to $43 billion and institutional volumes dropping 38% to $194 billion, as crypto market volatility dipped 16%. A $307 million expense tied to May’s data theft incident didn’t help either and, in fact, raised concerns about security and costs.
It’s not hard to see why those figures rattled investors. Trading volumes have been sliding, pointing to a broader market slowdown. While Bitcoin (BTC) managed a ~10% price bump last quarter, other digital assets together shed about 11% of their total value. Add to that the steady drip of regulatory pressure, which is never a friend to margins in an already cutthroat industry, and you’ve got a recipe for skepticism. In that context, the market’s doubt over whether the company can steady itself feels almost inevitable.
Still, it’s not all doom and gloom. Coinbase’s challenges are real, but they’re certainly not the whole story. The company is grappling with a cyclical industry, and the data breach, while costly, is a one-off setback. In fact, I believe that the bigger picture shows a company adapting to a rapidly evolving market, which brings us to the brighter side of things.
Bright Spots in a Stormy Quarter
Despite the top and bottom-line misses, Coinbase pulled off some serious wins in Q2 that merit a closer look. Stablecoin revenue, tied to USDC, jumped 12% quarter-over-quarter to $332.5 million, fueled by a 13% increase in USDC balances to $13.8 billion. Furthermore, the company’s push into financial services, including integrating USDC with Shopify Payments and launching the Coinbase One Card, is definitely gaining traction. These are just some examples of how Coinbase is building real-world utility for crypto, beyond just trading fees.
Coinbase also flexed its muscle in derivatives, launching CFTC-regulated perpetual futures in the U.S. and acquired Deribit, a leading crypto options exchange with $30 billion in open interest. Derivatives trading volume hit all-time highs, and the company listed over 300 spot crypto assets, with plans to integrate decentralized exchanges into its app for access to millions of tokens. These steps align with CEO Brian Armstrong’s vision of an “everything exchange,” positioning Coinbase to capture a broader slice of the financial pie.
Then you have the broader trend of institutional crypto adoption, which is another tailwind. Coinbase powers over 80% of custody for crypto ETFs and partners with heavyweights like BlackRock (BLK) and J.P. Morgan (JPM). With the GENIUS Act signed into law in July, providing regulatory clarity for stablecoins, Coinbase is well-placed to ride the wave of institutional interest as crypto becomes a mainstream asset class.
Valuing a Crypto Pioneer
The fact is that assigning a fair value to Coinbase is tricky because crypto is unlike any traditional industry. Its revenue swings with market volatility, and its growth hinges on regulatory shifts and adoption trends, making standard metrics like P/E feel a bit like fitting a square peg into a round hole. Now, with a P/E of around 40 based on this year’s projected EPS of $7.81, the stock might seem pricey. However, for a leader in a booming industry, it’s not outrageous.
Today, the market feels unusually charged as Bitcoin trades near $118,500 and Ethereum hovers close to $4,200, both brushing against all-time highs and hinting at strong underlying confidence. Meanwhile, Wall Street’s growing involvement in crypto, from the launch of ETFs to companies adding digital assets to their treasuries, is fueling demand for established and trusted platforms such as Coinbase.
In fact, COIN’s partnerships with over 240 businesses, like Stripe and PayPal (PYPL), and its role in custody for 150+ government agencies, cement its reputation as the go-to player in crypto.
This trust factor justifies a premium, as institutions will likely lean on Coinbase as they dive deeper into digital assets. So I believe the stock’s valuation reflects its potential to dominate a market where tokenized assets and stablecoin payments could redefine finance.
Is Coinbase Global a Good Investment?
There are 29 analysts offering price targets on COIN stock via TipRanks, with a fairly bullish consensus. Today, the stock carries a Moderate Buy consensus rating based on 14 Buy, 13 Hold, and two Sell ratings over the past three months. COIN’s average stock price target of $374.85 suggests more than 20% upside over the next twelve months.
COINing the Future Amid Crypto Volatility
Coinbase’s latest quarter was a reminder of just how volatile and unpredictable the crypto space can be. Even so, the company’s widening range of products, strong relationships with institutions, and leading position in custody and derivatives suggest it is built for the long haul.
More explicit rules and a continued wave of adoption, particularly from large investors, could give growth an extra push even if market conditions remain uneven. For investors who can stomach short-term swings, I think that Coinbase offers a rare blend of scale, trust, and innovation that could make today’s turbulence a compelling entry point into crypto’s next growth phase.