Coinbase (COIN) has been downgraded to a sales classification of Compass Point, which also reduces its starting point for the end of the price from $ 330 to $ 248, with reference to weaker than expected earnings and false interest rates in crypto shares as a key risk.
Coin acts modestly higher Monday to $ 316 after last week’s earning -related 18% jump.
“While we remain constructive on the current crypto cycle, we expect a minced 3Q together with weak seasonal provision in August/September and waning retail interest in Crypto Treasury stocks,” analysts wrote. “We also expect increased stableecoin competition to weigh both coin and crcls valuations in 2H25.”
Coinbase missed the expectations of results in the 2nd quarter, and trends at the beginning of the third quarter don’t look much better. Subscription and service revenue, a metric investor who sees as a reliable income flow, came in 8% under Wall Street estimates in the 2nd quarter. The center of the company’s Q3 forecast is also 5% below consensus.
“‘Other S&S revenue’ was an important contributor to Coin’s 2Q/3Q miss,” wrote Compass Point, pointing to a sharp quarterly move in Coinbase One and other tech-related fees that many investors had hoped would drive long-term growth.
Compass Point’s downgrade comes as the crypto market loses speed despite the fact that wider stock markets are recovering after last week’s dip. Bitcoin
And Ethereum has struggled to win land, and retail investors appear to withdraw from “Treasuryco” stocks – companies that have large amounts of BTC or other cryptos on their balance. This includes coin base and strategy (Mstr)of which the latter recently slowed down its Bitcoin purchase pace and changed towards raising money through preferred equity rather than share supply.
Analysts marked that elevated leverage in crypto markets poses an additional risk. July’s rally was driven by aggressive trade, but with open interest rates that rebuilt after a short dip in liquidations, a deeper sale could trigger another round of forced sales.
Valuation is also a problem. Despite the weak Q2 results, COIN shares rose 56% from May to July. Compass Point warns that “Coin still deals with 44x annual 3Q25E Street EBITDA forecast,” which it believes is too high considering headwinds in retail, ETF competition and defi and limited degradation regulatory breakthroughs.
Compass Point was also questionable that the Law of Clarity – a bill that was considered the key to regulatory reform – would adopt this year. “We are more skeptical of a bill on market structure that passes this year,” the company said, projecting movement in early 2026 instead.
Coinbase has floated the idea of offering stock trading to users, but analysts are convinced that it will be a meaningful income stream, especially with competitors like Robinhood already far ahead.
“Under a background of weak crypto -evil, we see Coins Premium Valuation Compress back against its prior reach,” the report concluded.
