Several prominent investment firms have downgraded their ratings for Coinbase and other cryptocurrency platforms in response to a significant decline in trading activity and falling token prices. This shift comes as analysts prepare for the upcoming first-quarter earnings reports, with many adjusting their forecasts to reflect a cooling market.
Research from Barclays and Oppenheimer indicates a consensus among analysts that expectations for the cryptocurrency sector are diminishing as trading volumes decrease. Barclays has taken a decisive step by downgrading Coinbase (COIN), citing that “global crypto trading activity has declined to a level not seen since the end of 2023.” The firm warned that without a resurgence in trading, Coinbase’s profitability could be at risk.
Data reveals a stark downturn in trading volumes for Coinbase, with March 2026 marking the lowest monthly trading volume since September 2024. Barclays estimates that trading volumes for the first quarter fell approximately 30% compared to the previous quarter, and April has shown no signs of recovery.
Coinbase and similar exchanges primarily generate revenue from transaction fees, making lower trading volumes a significant concern. The decline in activity is often attributed to traders stepping back during periods of market stagnation. Retail users, who may have actively traded during price rallies, tend to reduce their trading frequency when prices stabilize.
Barclays has revised its forecast for Coinbase’s adjusted EBITDA, now estimating it to be about 24% lower than the consensus on Wall Street, primarily due to reduced spot trading and retail engagement. The overall crypto market has also seen a downturn, with major tokens experiencing substantial price drops in the first quarter. Bitcoin’s value decreased by over 22%, while ether fell by 29%.
Oppenheimer echoed similar sentiments but maintained a more optimistic outlook for Coinbase. The firm has adjusted its forecasts to account for softer crypto prices and lower trading activity, influenced by broader economic uncertainties. Oppenheimer noted that current estimates on Wall Street do not fully capture the extent of the decline in trading volumes.
In its latest assessment, Oppenheimer has lowered its volume estimate for Coinbase to $211 billion for the quarter, down from a previous estimate of $244 billion. It now anticipates total revenue of $1.48 billion, which falls short of earlier predictions and consensus estimates.
The downgrades are not confined to Coinbase. Oppenheimer also highlighted Circle (CRCL), which continues to expand its USDC stablecoin network, reporting a quarter-over-quarter increase in market cap and transfer volume. However, other platforms like Bullish (BLSH) and Circle have also faced scrutiny, with Rosenblatt downgrading BLSH and Compass Point downgrading CRCL to “neutral” and “sell,” respectively.
Despite some positive indicators, the overall trend suggests a slowdown in the core business of crypto trading. Companies are exploring ways to diversify their revenue streams, but these efforts may take time to yield results. Coinbase is working towards becoming an “everything exchange,” incorporating derivatives and tokenized assets, although Barclays expressed skepticism about the immediate success of this strategy.
Regulatory uncertainties surrounding stablecoins also pose challenges. Barclays pointed out ongoing discussions in Washington regarding stablecoin regulations, which could impact revenue from stablecoin rewards. Conversely, Oppenheimer sees potential for growth in new use cases, particularly in prediction markets, which may support USDC development.
As the earnings season approaches, analysts are proactively adjusting their estimates to avoid being caught off guard by disappointing results. Coinbase is scheduled to report its second-quarter earnings on May 7, while Bullish will present its results on April 23. Circle has yet to announce its earnings date.
Investment firms have downgraded Coinbase and other crypto platforms due to a significant decline in trading activity and falling token prices. Analysts are adjusting forecasts ahead of the upcoming earnings reports, reflecting a broader slowdown in the cryptocurrency market.