Citi Cuts Coinbase Target 41 Percent Ahead of Q2 Earnings

Coinbase heads into its second quarter earnings report under a cloud of caution from one of its main backers. Citigroup decided to keep a buy rating on the stock, but analysts slashed the price target from $400 down to $235. The adjustment reflects expectations that the quarter will mark a low point for crypto trading, with spot volumes sitting near a two year trough.

Wall Street expectations are notably soft for the upcoming report. Analysts project revenue near $1.3 billion, which is down about 13 percent from a year ago. Transaction revenue is expected to drop to roughly $640 million because spot trading volumes have dried up across the industry. Other firms like Clear Street and Rosenblatt also trimmed their targets recently, showing broad agreement that the current quarter will be quiet.

Despite the gloomy volume outlook, some parts of the business remain stable. Subscription and services income, including interest from the USDC stablecoin, provides a cushion when exchange activity slows down. This steady income is likely why the stock has managed a small gain over the past month, while institutional money flow indicators stay mostly positive.

Traders are already looking past the near term earnings numbers toward upcoming policy changes in Washington. Momentum around the CLARITY Act market structure bill has kept investor spirits up, as clear federal rules could bring more institutional capital to the platform. Tonight's revenue numbers and management guidance will show whether Citi was right to worry or if institutional inflows will carry the day.