Crypto’s First Quarter Fiasco: Profits Dive and Analysts Panic!

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Markets

What to know:

  • Ah, the once-lustrous world of cryptocurrency; now Wall Street analysts are trimming their forecasts for Coinbase and other crypto firms as trading volumes and token prices have plummeted to levels reminiscent of a dreary winter’s day in late 2023.
  • Barclays has audaciously downgraded Coinbase, foreseeing a downturn in profitability so severe one might think they’ve peeked into a fortune teller’s crystal ball, while Oppenheimer, ever the optimist, has merely tweaked its revenue estimates yet remains cheerfully hopeful.
  • While there may be glimmers of hope in stablecoins and the blossoming realms of derivatives and tokenized assets, such nascent vigor has yet to bring warmth to the chilly core trading slowdown, compelling analysts to adjust their expectations like one would adjust a crooked painting before guests arrive.

As we wade into the early days of 2026, the crypto trading landscape has cooled considerably, prompting Wall Street analysts to frantically revise their forecasts before companies unveil their first-quarter earnings-like students sweating over exam results.

Research from Barclays and Oppenheimer reveals a curious consensus among analysts who, just weeks into the second quarter, find themselves collectively grimacing at the mounting evidence of declining trading volumes-evidence that has rendered prior projections laughably optimistic.

In a bold move, Barclays has downgraded Coinbase (COIN), lamenting that “global crypto trading activity has plummeted to a level not seen since the end of 2023.” They further warned that “absent a resurgence in near-term crypto trading activity, we foresee profitability at Coinbase being squeezed tighter than a pair of ill-fitting trousers.”

The tangible decline is evident. According to Barclays, Coinbase’s March trading volume was labeled “the lowest volume month since September 2024,” with April showing “no signs of improvement”-much like my attempts at gardening. For the first quarter, they estimate trading volumes fell approximately 30% from the previous quarter, a figure that would make even the most stoic investor choke on their morning coffee.

Coinbase and its fellow exchanges, which make their bread and butter from transaction fees, are in for a tough time; less trading equals less revenue. It’s as simple as that. When the market quiets, traders retreat like mice from a cat; retail users who once reveled in weekly trades during euphoric rallies might abandon ship altogether when prices stagnate. Multiply this behavior across millions of accounts, and watch exchange volumes plummet faster than a lead balloon.

This phenomenon matters greatly, for transaction fees remain the lifeblood of most crypto platforms. Barclays highlighted this peril, declaring that its forecast for Coinbase’s adjusted EBITDA is approximately 24% below market expectations, primarily due to the woefully weak spot trading and retail activity.

In the first quarter, crypto prices have taken a hit, with the average value of major tokens plummeting-oh, the humanity! Bitcoin has lost over 22% of its value, while ether has nosedived by a staggering 29%. One could almost hear the collective groan of crypto enthusiasts echoing through the digital ether.

Oppenheimer, while singing a slightly more optimistic tune about Coinbase, has slashed its forecasts due to the softer crypto prices and diminished trading activity in the first quarter, exacerbated by an all-encompassing sense of economic uncertainty. They noted that current Wall Street estimates still fail to fully account for the drastic drop in trading volumes during this period-an oversight that is now being rectified.

Across the industry, analysts are hastily revising their models downward, reflecting the unmistakable quietude of the market. Oppenheimer has trimmed its Coinbase volume estimate to $211 billion for the quarter, down from a previously lofty $244 billion, and now anticipates total revenue of $1.48 billion-figures that trail behind earlier forecasts like a dog chasing its tail.

But let us not confine our disappointment solely to Coinbase. Oppenheimer has noted that Circle (CRCL) continues to broaden the USDC stablecoin network, with its market cap and transfer volume rising by approximately 1% and 12% quarter-over-quarter, respectively-small victories in a sea of despair.

Meanwhile, crypto platform Bullish (BLSH), the proud owner of CoinDesk, observed “strong on-platform activity” related to February’s volatility, although spot volumes failed to meet expectations. Consequently, Rosenblatt downgraded BLSH earlier this week, while Compass Point did the same for CRCL-oh, what a tangled web we weave!

Even these few bright spots merely underscore the overarching malaise: the core business of crypto trading is undeniably slowing. Efforts to diversify revenue streams are underway, but alas, they may take time to offset the downturn. Coinbase’s noble ambition to transform into an “everything exchange” encompasses derivatives, tokenized assets, and new markets. However, Barclays approached this strategy with skepticism, noting that it “is likely to take a long time to pay off,” and that their outlook sees “little ‘right to win’ in new asset classes like equities.”

Stablecoins, often regarded as a more reliable revenue source, also find themselves embroiled in uncertainty. Barclays pointed to ongoing debates in Washington regarding regulation, highlighting that the status of stablecoin rewards “remains in question.” Simultaneously, Oppenheimer perceives potential near-term support from emerging use cases, asserting that “increased prediction market activity could bolster USDC growth.”

Yet, despite these pockets of potential, they remain secondary to the prevailing concern of trading.

The broader takeaway here, dear reader, is that analysts are moving preemptively. With earnings season looming like a dark cloud overhead, firms are lowering estimates now rather than risk discovering weak results later, akin to finding a hole in one’s pocket after a shopping spree.

Coinbase is set to report second-quarter earnings on May 7, while Bullish will unveil its findings on April 23. As for Circle, it remains tight-lipped, with no announcement date yet in sight.

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2026-04-11 19:57