Coinbase shares rose about 3% on Tuesday even after William Blair sharply reduced its medium-term revenue and earnings forecasts for the crypto trading platform, highlighting a market split between weak near-term operating expectations and hopes for a broader recovery in digital asset activity.
The Chicago-based firm cut its 2026 revenue estimate for Coinbase by 12% and lowered its 2027 forecast by 13%. It also reduced expected EBITDA for both years by 34%, pointing to a slower recovery in trading activity than previously expected. Despite the cuts, William Blair kept its “outperform” rating on the stock, saying much of the bad news may already be reflected in the share price.
Analysts Andrew Jeffrey and Ryan Choudhury said Coinbase’s profitability is likely to hit its weakest point in the second half of 2026 before improving in 2027. Their report described the current period as a difficult stretch for crypto-linked revenue, but not necessarily a permanent reset for the company’s business model.
Coinbase has been under pressure this year as crypto trading volumes remain far below the highs seen during previous market cycles. The stock has dropped about 30% year to date, while Bitcoin has fallen roughly 26%. The decline has weighed on companies tied to digital assets, including Circle, which listed in June 2025 at $31 per share and has dropped about 20% since the start of the year.
William Blair now expects Coinbase’s total trading volume to fall 44% in 2026 to about $669 billion. The firm forecasts a rebound of more than 32% in 2027, based on a recovery in market activity and a more developed regulatory environment. The report also pointed to institutional adoption and spot Bitcoin ETFs as structural changes that were not present during the 2022 crypto downturn.
The main question for Coinbase is whether those long-term supports can offset a severe slowdown in transaction revenue, which remains central to the company’s earnings. Trading volume has historically driven Coinbase’s financial performance, especially during periods of rising crypto prices and heavy retail participation. When volume fades, revenue and margins can contract quickly.
Forecasts point to a delayed recovery
William Blair’s revised outlook suggests that Coinbase may not see a meaningful recovery until 2027. The firm expects a sharp contraction in volume next year before activity begins to improve. That timing matters because Coinbase’s revenue base is still closely linked to crypto market cycles, even as the company tries to diversify.
The report said Coinbase’s Ethereum Layer-2 network, Base, could become a more important source of growth. Base has gained attention as a lower-cost network for decentralized finance applications, payments, and other blockchain-based services. If activity on the network grows, Coinbase may benefit from fees, infrastructure use, and related products.
William Blair also said derivatives and prediction markets could help broaden Coinbase’s revenue sources. Retail derivatives generated more than $200 million in annualized revenue during the first quarter, according to the report. That figure shows how new products may become meaningful, though they are not yet large enough to fully replace weak spot trading revenue.
Prediction markets and perpetual contracts are expected to remain in focus during the second quarter, according to Piper Sandler analyst Patrick Moley. He lowered his Coinbase price target to $155 from $170 while keeping a neutral rating on the stock. Moley said competitive pressure could increase later in the year, particularly as more platforms move into similar products.
A neutral rating from Piper Sandler reflects a more cautious view than William Blair’s “outperform” stance. Both reports, however, point to the same central issue: Coinbase’s business faces a weak volume environment now, while its longer-term outlook depends on whether new products and regulatory clarity can support future growth.
Stock rises despite weaker estimates
The 3% rise in Coinbase shares on Tuesday suggests traders were not surprised by the lowered forecasts. Stocks often rise after negative reports when the market had already priced in a worse outcome, or when traders focus on future recovery potential instead of current weakness.
William Blair’s decision to maintain its positive rating may have helped support the stock. The firm argued that expectations around Coinbase had already fallen enough to limit the impact of further estimate cuts. In other words, traders may be looking beyond the earnings trough expected in 2026 and toward a possible rebound in 2027.
That does not mean the path is clear. Coinbase remains exposed to market cycles, regulatory changes, product competition, and shifts in risk appetite across digital assets. If Bitcoin and Ethereum volumes remain weak, Coinbase could continue to face pressure on transaction revenue. If market activity improves, the company could recover faster than current forecasts suggest.
The stock’s year-to-date drop also leaves room for sharp daily moves. After large declines, even modestly positive news can trigger rebounds as traders reassess valuation and positioning. Tuesday’s gain may reflect that dynamic more than a clear change in fundamentals.
Bitcoin chart draws new attention
The move in Coinbase shares came as Bitcoin showed signs of stabilization after months of weakness. Technical analyst John Bollinger, creator of the Bollinger Bands indicator, said Bitcoin’s daily chart has formed a “W” double-bottom reversal pattern. He noted that a similar structure is also visible on the weekly chart.
A double bottom is often watched by chart-focused traders because it can show that selling pressure has weakened after two failed attempts to push prices lower. The pattern is usually considered more reliable when price breaks above the resistance level between the two lows.
Bollinger said the pattern could confirm an upward shift if resistance is broken. He also cautioned that bullish formations can fail if selling pressure returns. Earlier this year, he disclosed that his asset-management entity held long Bitcoin positions, aligning with his constructive technical view.
Bitcoin recently recovered to trade around $64,750, placing attention on the $65,000 area. A sustained push above that level, especially with stronger spot volume, would be seen by many chart watchers as important confirmation of the double-bottom setup. Failure to clear that zone could leave the market vulnerable to another pullback.
The technical picture is not the same as a confirmed trend change. Bitcoin has seen several short-lived rebounds during this downturn, only for rallies to fade under renewed selling. For now, the chart is showing improvement, but confirmation depends on follow-through.
On-chain data shows easing selling pressure
New data from Glassnode showed that selling by long-term Bitcoin holders peaked about two weeks ago and has since declined. Long-term holders are often watched closely because they tend to sell during strong rallies or when confidence weakens after extended drawdowns.
Glassnode reported notable buying activity during June’s price trough, with wallets of different sizes accumulating coins. That suggests some traders used the decline to increase holdings, even as broader demand remained limited.
The report also said derivative positions continue to unwind. A reduction in leveraged positions can help reduce the risk of forced selling, but it may also point to caution among traders. When leverage falls, price moves can become less explosive unless spot demand returns.
Options markets also show that the fear premium is narrowing, according to Glassnode. That means demand for downside protection has eased. This can be a sign that traders see less immediate risk of a sharp decline, though it does not guarantee a sustained rally.
The key weakness remains spot demand. Glassnode said a sustained return of spot market demand has not yet emerged. Without stronger buying in the underlying market, rebounds may remain fragile.
Macro backdrop gives crypto some relief
Bitcoin’s latest rebound has also been supported by changes in the broader economic backdrop. The United States reported adding only 57,000 jobs in June, a figure that pointed to slowing labor-market momentum. Softer employment data, combined with cooling inflation readings, has encouraged traders to consider more risk-sensitive assets again.
When inflation data came in below expectations on Tuesday, Bitcoin’s gains outpaced major U.S. stock indices. That reaction suggests digital assets may be responding more strongly to the prospect of easier financial conditions.
Correlation analysis shows Bitcoin’s inverse relationship with the U.S. Dollar Index has deepened, while its link to equities has weakened. A weaker dollar often supports assets priced in dollars, including Bitcoin, because it can improve liquidity conditions and risk appetite.
The shift does not mean Bitcoin has fully decoupled from stocks. Digital assets still react to interest-rate expectations, liquidity, and broader market stress. But the latest pattern suggests the dollar may be a more important short-term driver.
Spot Bitcoin ETFs have also become part of the market structure. Large fund products absorbed about $191 million over two days, ending a difficult stretch in which around $2.73 billion exited the market. ETF flows are closely watched because they can show whether larger pools of capital are moving back into Bitcoin after periods of stress.
Coinbase looks to diversify beyond trading
Coinbase’s longer-term challenge is to reduce its dependence on spot trading. Transaction revenue remains highly cyclical. When crypto prices rise and trading activity increases, Coinbase can benefit quickly. When volumes fall, earnings can weaken just as quickly.
Products such as derivatives, staking-related services, custody, stablecoin revenue, subscriptions, and Layer-2 network activity are intended to smooth that cycle. Base could become especially important if more developers and users move activity onto the network.
Derivatives and prediction markets may also provide new revenue, but they come with competition and regulatory scrutiny. Perpetual contracts, in particular, are popular in crypto markets, but U.S. access and oversight remain important issues. Coinbase’s ability to grow those products will depend partly on how rules evolve.
William Blair’s report linked future growth to maturing regulation and expanding network activity. Clearer rules could help companies develop products with less legal uncertainty. They could also encourage more institutions to use regulated crypto infrastructure.
Still, regulatory clarity does not guarantee rapid growth. Traders must also return in larger numbers, and digital asset prices must stabilize enough to support renewed activity. The current market is showing signs of repair, but not yet a full recovery.
Market remains in transition
The sharp cuts to Coinbase’s future revenue and EBITDA estimates show how weak crypto volume has become. At the same time, the stock’s rise on Tuesday shows traders are weighing more than near-term earnings pressure.
Bitcoin’s improving chart pattern, easing long-term holder selling, better ETF flows, and a softer macro backdrop have created a more constructive tone. But the recovery remains incomplete. Spot demand is still limited, derivatives positioning is still being reduced, and Coinbase’s projected earnings trough may not arrive until the second half of 2026.
For Coinbase, the next phase will depend on whether market activity improves before then and whether new business lines can become large enough to cushion weak trading revenue. William Blair sees the turning point in 2027, with volume rebounding after a steep contraction. Piper Sandler remains more cautious, pointing to competition and uncertainty around newer products.
For Bitcoin, the $65,000 area has become a key short-term level. A clean break above that zone would strengthen the double-bottom argument. A failure to hold recent gains would keep the market in a range and delay confirmation of a broader trend reversal.
The current picture is mixed but improving. Coinbase faces reduced earnings expectations, yet its shares rose as traders looked toward a possible recovery. Bitcoin remains below a key confirmation level, yet selling pressure appears to be easing. The market has not fully turned, but the conditions for a more durable rebound are beginning to take shape.
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