--- title: "COIN: Long Dry Spell, Awaiting Timely Policy Tailwinds" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/40546837.md" description: "$Coinbase(COIN.US) reported Q1 results, and most of the pullback was largely as anticipated. The quarter played out against a backdrop of the CLARIFY bill stalling and Middle East tensions lifting oil and even reviving rate-hike expectations, both negatives for risk assets.However, crypto-exposed stocks moved ahead of fundamentals; as geopolitical tensions eased in Apr, digital assets staged a rebound. Versus last quarter’s earnings day, BTC climbed from $67k to $80k, and Coinbase’s valuation rose from $38.5bn to $50bn..." datetime: "2026-05-08T07:30:54.000Z" locales: - [en](https://longbridge.com/en/topics/40546837.md) - [zh-CN](https://longbridge.com/zh-CN/topics/40546837.md) - [zh-HK](https://longbridge.com/zh-HK/topics/40546837.md) author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- # COIN: Long Dry Spell, Awaiting Timely Policy Tailwinds $Coinbase(COIN.US) released its Q1 print, largely delivering the anticipated slump amid delays to the CLARITY Act and heightened Middle East tensions that lifted oil and even revived rate-hike expectations, both negative for risk assets. That said, crypto equities traded ahead of fundamentals, and as geopolitical stress eased in Apr, the space saw a partial rebound. Versus the prior earnings date, BTC rose from ~$67k to ~$80k, and Coinbase’s market cap climbed from ~$38.5bn to ~$50bn. What will sustain the recovery trend from here? Specifically: Key points follow. **1\. Risk-off cooled trading:** Revenue decline was again led by trading, with Q1 trading revenue down 40% YoY, driven by a 36% drop in volumes. This was slightly better than the 39% decline in spot volumes across centralized exchanges. After two quarters of underperformance vs. peers, Coinbase’s competitiveness showed signs of recovery, likely aided by the Deribit acquisition and event-prediction trading. At an industry level, DEXs continued to outperform and gain share. Avg. monthly trading users fell by 0.9mn QoQ, and total platform assets shrank 22%. Engagement and balances both weakened. **2\. Subscription guide turning up:** Trading revenue is inherently volatile, so we look to staking, custody, and stablecoin-related income as better indicators of Coinbase’s underlying operating momentum. While subscriptions are not directly tied to trading, they still move with industry sentiment. (1) Staking rewards, ~20% of subscriptions, fell 34% QoQ as ETH, SOL, and others dropped ~30%. Token price declines directly pressured staking payouts. (2) Stablecoin interest, ~50% of subscriptions, saw USDC issuance rise QoQ, but the take rate fell due to rate cuts late last year. Coinbase’s share of USDC held rose another 1pct QoQ to 24.7%, but with richer stablecoin incentives, we estimate Coinbase now passes ~60% of stablecoin yield to users vs. ~40% last year. Whether stablecoin interest can continue to be paid is a key controversy in the CLARITY Act; a compromise solution is likely, otherwise the legislation remains stuck. Management guided Q2 subscription revenue at $565–645mn, modestly higher QoQ on improving market tone. (3) The remaining ~10% covers institutional custody, Base chain income, etc. Custody likely remains market-sensitive, while Base chain revenues continue to expand steadily, supported by AI Agent payment activity. Base now accounts for 62% of stablecoin transaction volume on-platform, with over 90% of AI Agent transactions occurring on Base and 99% settled in USDC. Adoption remains concentrated. **3\. Profit under further pressure:** With revenue slumping and costs sticky, earnings pressure intensified, and Coinbase also stepped up R&D in Q1 (reflecting Q4 Deribit acquisition costs and new product work on equities trading, 24/7 perpetuals, and event prediction), driving a 90%+ YoY drop in core OP. Execution on growth initiatives weighed on near-term profitability. The company is cutting 14% of staff (~700 roles, focused on ops/management) to lift efficiency, expected to complete in Q2, with ~$50mn in severance. Savings should phase in from Q2 onward. **4\. Buybacks ramped:** COIN repurchased nearly $1.1bn of stock in Q1, faster than last quarter, with $1.3bn capacity remaining. Cash exceeded $10bn at quarter-end, and a $1.3bn convertible matures in Jun, likely to be repaid in cash. **5\. Key metrics at a glance** BBG consensus appears lagged and did not capture the latest shifts in investor expectations. We therefore cite Barclays’ Q1 preview; while some metrics still missed, the gap vs. actuals was far less dramatic. **Dolphin Research view** Crypto market conditions in Q1 were broadly similar to Q4 in terms of price ranges, and arguably better from a trend perspective given a bottoming consolidation vs. Q4’s one-way decline. However, repeated geopolitical swings and elevated oil expectations severely compressed trading appetite. Over the past year, COIN’s valuation has tracked spot crypto prices more closely than reported earnings, with competition mattering but not yet dominant while the overall pie is still expanding. When valuations have largely repaired, further upside depends more on incremental catalysts. Q1 results were weaker than Q4 in absolute terms, but with crypto prices stabilizing, expectations actually turned more constructive for COIN’s valuation. Price action remains the primary driver. Crypto prices hinge on liquidity and Gov. policy. With Middle East tensions easing, inflation may remain sticky, but the key swing factor is the CLARITY policy path; we expect progress in 2–3 months, potentially a compromise that disallows explicit interest while offering activity-linked incentives, otherwise the issue could be shelved into the U.S. midterms. On valuation, our prior conservative base range was $26–38bn, benchmarking mature financials at ~10–15x EV/EBITDA on cautious 2026 assumptions; COIN now sits above that safety band. Near-term profit pressure may slow the repair, making policy outcomes the bigger driver. **Detailed analysis follows** More below. **I. Coinbase core biz.** Coinbase is building a comprehensive on-chain financial platform beyond the exchange, with a key edge in regulatory compliance. If regulators actively endorse and promote virtual asset markets, COIN is well positioned. Revenue breaks into three buckets: **trading, subscriptions, and other**. Trading is highly sensitive to market activity and still accounts for 50%+, while subscriptions and other (custody/settlement, staking, stablecoins, data/cloud, and investment income) act as stabilizers with steadier growth. A clear trend: as use cases broaden, competition intensifies, and the structure of incremental capital shifts, COIN’s reliance on trading will keep declining. The strategy is to attract users with low fees and monetize via integrated financial services. Today that primarily means fee discounts for institutions leveraging compliance advantages. As stablecoins penetrate cross-border B2B and RWA-on-chain use cases, Coinbase could become the pick-and-shovel provider in the crypto gold rush. ![图示描述已自动生成](https://pub.pbkrs.com/uploads/2026/d76180928353906c6af72ffae49b803f?x-oss-process=style/lg) ![图示描述已自动生成](https://pub.pbkrs.com/uploads/2026/fc180f999f03028d9c02122590515911?x-oss-process=style/lg) **II. Platform activity declined** Engagement softened further. Turning to the user ecosystem: amid higher macro uncertainty in Q1, trading users fell by a net 0.9mn to 8.2mn (Q4 inferred from the full-year avg. of 9.2mn), and per-user trading volume dropped 42% QoQ. Sentiment hit a trough. ![图片包含 徽标描述已自动生成](https://pub.pbkrs.com/uploads/2026/0748e3ce1a014ac3a3735554a75817bf?x-oss-process=style/lg) **Platform AUM continued to shrink,** with end-quarter client assets plus segregated custody totaling ~$30bn (incl. fiat), down 21% QoQ. Beyond market cap moves, there was active outflow, which we attribute more to the uncertain macro tape than competitive share shifts. ![图片包含 图表描述已自动生成](https://pub.pbkrs.com/uploads/2026/e304b283f0874216da7afe8e4d1c0784?x-oss-process=style/lg) **III. Trading: under pressure as expected; COIN’s spot CEX share steady** Near-term fundamentals remain tied to trading (53% of revenue), with Q1 down 40% YoY on a 36% volume decline. This was slightly better than the 39% drop across spot CEX volumes. Industry-wide, crypto market cap retreated to ~$3tn by quarter-end, spot exchange volumes fell 39% YoY, and Coinbase declined 36%, implying marginal share recovery, perhaps from new products lifting activity and stickiness. Product breadth matters for retention. ![图片包含 图标描述已自动生成](https://pub.pbkrs.com/uploads/2026/0e559ce1593c3dce0d2ede3534d279ce?x-oss-process=style/lg) Trading revenue is ultimately driven by scale and volatility, with an industry-wide fee compression trend intact. Q1 trading revenue was $760mn, -40% YoY and -23% QoQ. **III. Subscriptions: Base chain continues to expand** Q1 subscriptions were $580mn, -20% QoQ, with Q2 guidance midpoint at $605mn, implying QoQ growth as conditions improve. The backdrop is turning more supportive. Breakdown: Key components follow. (1) Staking rewards, ~20% of subscriptions, fell 34% QoQ as ETH/SOL prices dropped ~30%. Token beta drove the decline. (2) Stablecoin interest, ~50% of subscriptions: USDC issuance increased QoQ, but the take rate fell on prior rate cuts. Coinbase’s USDC holdings share rose another 1pct to 24.7%; with richer incentives, we estimate ~60% of yield is now shared with users vs. ~40% last year. The permissibility of paying stablecoin interest is central to CLARITY discussions; a compromise is likely, or the bill may remain stalled. Management guided Q2 subscriptions at $565–645mn, slightly higher QoQ on a warmer market. ![图表, 直方图描述已自动生成](https://pub.pbkrs.com/uploads/2026/6d81a821a7c2253d2f8d0b2dcd20129b?x-oss-process=style/lg) (3) The remaining ~10% includes institutional custody and Base chain income. Custody may still be market-driven, while Base chain revenues can keep expanding on AI Agent payment activity. Base now accounts for 62% of stablecoin trading volume on the platform, with 90%+ of AI Agent transactions on Base and 99% settled in USDC. Momentum remains strong. **IV. Profit collapse intensified** With revenue down and costs rigid, earnings pressure was significant, and Coinbase increased R&D in Q1 (reflecting Q4 Deribit acquisition costs and work on equities trading, 24/7 perpetuals, event prediction), pushing core OP down 90%+ YoY. Investment cycles are showing up in P&L. The company is executing a 14% headcount reduction (~700 roles in ops/management), expected to complete in Q2, with ~$50mn in severance. Cost actions should support margins over time. Core OP in Q4 was only $49mn (ex investment gains/losses and interest), down 84% QoQ. Adj. EBITDA in Q1 was $303mn with a 22% margin, -10ppt QoQ. **Dolphin Research 'Coinbase' historical pieces:** Feb 13, 2026 call notes: '[Coinbase (Trans): 2025 was an investment year; 2026 will be more disciplined](https://longbridge.cn/topics/38719968?channel=SH000001&invite-code=355628&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=2316384b-0bd2-4331-8f7b-382dba7b8fa7)' Feb 13, 2026 earnings take: '[Bad tape + weak results: When does Coinbase bottom?](https://longbridge.cn/topics/38718107?channel=SH000001&invite-code=355628&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=eefc1e90-50a2-47be-8421-89383301d42b)' Aug 1, 2025 call notes: '[Coinbase (Trans): Multiple new lines — payments, DEX, CAS...](https://longportapp.com/en/topics/32496816?invite-code=032064)' Aug 1, 2025 earnings take: '[Coinbase: Bleak results, hard to douse the on-chain fire](https://longportapp.com/en/topics/32491968?invite-code=032064)' Jul 3, 2025 Initiation (Part III): '[Coinbase vs Circle: A symbiotic struggle in stablecoins — who leads?](https://longportapp.cn/en/topics/31451868?invite-code=032064)' Jul 2, 2025 Initiation (Part II): '[Stablecoins: Don’t doubt it — Coinbase’s iPhone moment](https://longportapp.cn/en/topics/31396708)' Jul 1, 2025 Initiation (Part I): '[Coinbase: On-chain is hot — can the pick-and-shovel seller win easily?](https://longportapp.cn/en/topics/31350474)' **Risk disclosure and statements:** [**Dolphin Research disclaimer and general disclosures**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [SOL.US](https://longbridge.com/en/quote/SOL.US.md) - [COIN.US](https://longbridge.com/en/quote/COIN.US.md) - [BTC.US](https://longbridge.com/en/quote/BTC.US.md) - [BASE.US](https://longbridge.com/en/quote/BASE.US.md) ## Comments (2) - **虎叔说财经 · 2026-05-08T08:28:27.000Z**: 1