Analyst Benjamin Buddish warns that global trading activity has fallen to pre-ETF levels despite a favourable regulatory backdrop, projecting Q1 transaction revenue nearly $200 million below consensus.
Barclays has downgraded Coinbase from neutral to underweight with a $140 price target, warning that global cryptocurrency trading activity has declined to levels not seen since the end of 2023, a period before spot bitcoin ETFs existed and before the post-election rally that was supposed to mark the dawn of mainstream adoption.
The downgrade, issued by analyst Benjamin Buddish on 11 April, arrives with numbers that are difficult to argue against. Barclays estimates Coinbase processed $196 billion in trading volume during the first quarter of 2026, down roughly 30 per cent from the prior quarter. March was the exchange's weakest month since September 2024, and April, the bank noted, is showing "no signs of improvement."
The revenue consequences are stark. Barclays projects transaction revenues of $678 million for Q1 — some $198 million below the Street consensus of $876 million. Its adjusted EBITDA forecast sits approximately 24 per cent below the average analyst estimate, driven almost entirely by weaker spot trading and retail activity. Coinbase's stock, which has fallen 20 per cent since the start of the year, was trading at $186 on the day of the downgrade.
"Despite a pro-crypto President and favourable regulatory environment, global crypto trading activity has declined to a level not seen since end of 2023," Buddish wrote. The statement is worth reading twice because it dismantles the thesis that regulatory clarity alone drives trading volume. The Trump administration has delivered more favourable crypto policy in eighteen months than any prior government managed in a decade; the SEC has clarified token classifications, the GENIUS Act is law, and Coinbase itself has outlined plans to dominate the crypto securities marketplace. None of it has been enough to offset what is fundamentally a demand problem.
Bitcoin lost more than 22 per cent of its value in the first quarter. Ether dropped 29 per cent. The stablecoin market, at a record $320 billion, tells a story of capital preservation rather than risk appetite — traders are parking money, not deploying it. The rotation from bitcoin ETFs into ether funds that some analysts had cited as a bullish signal looks less like conviction and more like portfolio shuffling within a shrinking pool.
Coinbase is not standing still. The company has been pursuing what management calls the "everything exchange" strategy — expanding into stock trading, wealth advisory, prediction markets and stablecoin-based revenue streams. Its partnership with Circle on USDC distribution generates a steady take regardless of trading volumes, and the conditional OCC trust charter it received in early April positions it to compete for institutional custody mandates on a federal basis.
But diversification takes time, and trading fees remain the engine. Coinbase's Q4 2025 earnings showed how quickly the business can swing: the post-election euphoria that pushed bitcoin above $100,000 generated record transaction revenue; the subsequent drawdown has now pushed volumes to a floor that even management didn't anticipate. The cyclicality that crypto bulls insisted the industry had outgrown is back, wearing the same clothes.
Barclays is not alone in its pessimism. Thirty-eight analysts cover Coinbase, and the consensus has been drifting lower throughout April. The broader crypto exchange sector faces the same headwinds — Binance, Kraken and OKX have all reported declining volumes, while the DeFi sector's flagship lending rates have fallen below traditional savings accounts for the first time. The infrastructure for a massive market exists. The market simply isn't using it at scale.
The geopolitical backdrop isn't helping. Bitcoin slid below $72,000 after US-Iran peace talks collapsed in Islamabad, and Trump's subsequent order to blockade the Strait of Hormuz pushed oil back above $100 a barrel. The correlation between crypto and risk assets has tightened during 2026 in a way that bitcoin maximalists had long insisted wouldn't happen. It happened.
The irony of Coinbase's position is that the company is probably better prepared for a downturn than at any point in its history. The OCC charter, the stablecoin revenue, the international expansion: these are real structural improvements that will matter when volumes recover. Barclays' downgrade is a verdict on the current quarter, not the company's long-term viability. But the current quarter is what stock prices reflect, and $140 implies nearly 25 per cent downside from where the shares traded on Friday.
Coinbase reports Q1 earnings in early May. If the numbers confirm Barclays' estimates — $196 billion in volume, $678 million in transaction revenue — the stock will face a market that has already priced in bad news and will demand to know whether revenue diversification is arriving fast enough to offset the trading drought. March was the worst month in over a year, April has offered no reprieve, and thirty-eight analysts are watching.
