Coinbase Stock Plunges Over 50% as Crypto Winter Deepens — Can the Exchange Weather the Storm?

The cryptocurrency market’s brutal downturn has delivered a gut-punch to Coinbase (NASDAQ: COIN), America’s leading digital asset exchange, with shares cratering more than 50% since bitcoin’s euphoric peak above $126,000 in early October. The pain has accelerated in 2026 alone, with COIN stock tumbling a staggering 27% year-to-date, leaving investors questioning whether the once-unstoppable crypto juggernaut can navigate these treacherous waters.

As the dust settles ahead of Coinbase’s crucial fourth-quarter earnings report—slated for release after Thursday’s market close—Wall Street analysts are scrambling to recalibrate their expectations for a company that has become synonymous with the crypto revolution.

JPMorgan Sounds the Alarm: 50% Price Target Cut, Yet Still Bullish

In a dramatic move that sent shockwaves through trading floors, JPMorgan’s veteran analyst Ken Worthington slashed his price target on Coinbase from $399 to $290—a brutal 50% reduction. However, in a testament to the stock’s precipitous decline, this slashed target still implies a remarkable 75% upside from COIN’s current trading price of $165.50.

“Despite the dramatic cut, our long-term thesis remains intact,” Worthington stated, highlighting the extreme volatility that has characterized crypto markets in recent months. “The fundamentals supporting digital asset adoption remain compelling, even as near-term headwinds intensify.”

Worthington’s revised estimates paint a sobering picture of Coinbase’s operational landscape. He projects adjusted EBITDA of $734 million for the quarter, down from $801 million in Q3—a sharp deceleration driven by a perfect storm of challenges: declining trading volumes, weaker cryptocurrency prices, and sluggish growth in USDC stablecoin balances.

The analyst estimates spot crypto trading volume of approximately $263 billion for the quarter, with USDC-related revenue projected at $312 million. These headwinds are partially mitigated by Coinbase’s strategic acquisition of Deribit, the crypto derivatives exchange purchased in August, which contributed a full quarter of operations to the company’s results.

Including Deribit’s contribution, JPMorgan models total transaction revenue of $1.06 billion, with the derivatives platform accounting for roughly $117 million on an estimated $586 billion in trading volume. This compares to $1 billion in transaction revenue reported in the previous quarter, suggesting the Deribit acquisition is already beginning to bear fruit.

On the subscription and services front, the bank expects revenue of $670 million, falling short of Coinbase’s prior guidance range of $710 million to $790 million. This shortfall reflects softer crypto prices, lower staking yields, and slower USDC growth. However, Worthington anticipates operating expenses to come in below guidance as the company aggressively reins in costs amid the market downturn.

Wall Street Divided: Contrasting Views Emerge

The Street’s sentiment toward Coinbase remains deeply divided as analysts parse the company’s ability to weather the crypto winter.

Barclays analyst Benjamin Budish has taken a more conservative stance, positioning his estimates roughly 10% below consensus on adjusted EBITDA. “We are notably lower on retail trading revenues, based on read-throughs from Robinhood, and blockchain rewards revenues,” Budish wrote in his research note. He suggests that consensus estimates may not yet fully reflect publicly available volume data that paints a concerning picture.

Barclays estimates Coinbase exchange volume of approximately $261 billion in the quarter. The firm points to Robinhood’s (NASDAQ: HOOD) reported retail crypto volumes—which have historically tracked closely with Coinbase’s—falling about 15% quarter-over-quarter as a troubling indicator.

Compass Point has adopted an even more bearish posture. Analyst Ed Engel declared himself negative on the stock heading into earnings, warning that investors should brace for disappointment in the subscription and services segment. “While investors place a premium multiple on COIN’s S&S segment, we expect 4Q results to affirm overall revenue remains tied to overall crypto prices,” Engel cautioned. He also anticipates January trading revenue to reflect what he describes as Coinbase’s weakest retail engagement since the third quarter of 2024.

The Bigger Picture: Beyond the Numbers

As investors digest the headline figures, attention will inevitably turn to management commentary on several critical fronts:

Trading Activity Momentum: Investors will scrutinize early 2026 trading patterns to gauge whether the recent weakness represents a temporary blip or a more sustained downturn. The January trading data will be particularly telling, as it will provide the first glimpse into how retail investors are responding to the extended crypto winter.

USDC Sustainability: The stability and growth of USDC-related income represents a crucial pillar of Coinbase’s business model. With stablecoin balances showing signs of stagnation, questions loom about the long-term viability of this revenue stream in a market characterized by heightened volatility and regulatory uncertainty.

Deribit’s Impact: The derivatives exchange acquisition represents Coinbase’s most significant strategic move in years. Investors will be keen to understand whether Deribit can meaningfully offset the swings in spot crypto markets and provide a more stable revenue foundation.

Cost Management: With the company already signaling expense discipline, the earnings call will likely provide insight into how aggressively Coinbase is pursuing cost-cutting measures and whether these efforts might impact product development and competitive positioning.

Regulatory Landscape: Though not explicitly addressed in the current earnings preview, the evolving regulatory environment for cryptocurrency exchanges in the United States remains a critical backdrop that could significantly impact Coinbase’s operational freedom and growth prospects.

The Road Ahead: Bull Case vs. Bear Case

The stark divergence in analyst perspectives reflects the fundamental uncertainty surrounding Coinbase’s trajectory. Bulls point to the company’s dominant market position, diversified revenue streams, and the long-term secular growth story of cryptocurrency adoption. They argue that the current valuation—trading at a fraction of its peak—presents a compelling entry point for investors with a multi-year horizon.

Bears, however, emphasize the cyclical nature of crypto markets and question whether Coinbase can maintain its premium valuation multiples in an environment where trading volumes and transaction fees remain under pressure. They worry that the company’s growth story may be more closely tethered to crypto price appreciation than many investors realize.

As Thursday’s earnings release approaches, all eyes will be on Coinbase’s ability to provide clarity amid the fog of market uncertainty. The numbers will tell part of the story, but management’s forward guidance and strategic commentary may prove even more consequential in determining whether this crypto winter represents a temporary setback or a more fundamental challenge to Coinbase’s market leadership.

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