Coinbase closed poorly on Friday. If you had been watching the ticker that afternoon, you would have seen the same red wash spreading across Strategy and Robinhood as well. The stock ended at $184.99, down an additional 4.43%. Cryptocurrency stocks typically move in unison. Ethereum and Bitcoin both declined, and there was little opposition from the trading platforms that depend on transaction volume.
Looking at the longer chart, I’m struck by how much this thing has dropped. COIN reached $444 in July of last year. It is currently less than $185. It’s not a dip. That’s the kind of drop that completely changes the conversation about a business at dinner parties. The easy money crowd seems to have left the building, leaving behind a smaller, more skeptical group that is attempting to determine whether $185 is a floor or a trapdoor.
The figures below are not attractive. With revenue down about a third from the same period last year, Coinbase reported a net loss for the first quarter, severely missing earnings. The more difficult news was that there would be a $50–60 million restructuring charge in addition to a 14% workforce reduction, or roughly 700 employees. The official explanation is that AI has reduced resolution times by 90% by handling the majority of the compliance work. That might be accurate. It’s also the kind of justification businesses use to make layoffs seem like progress.
And yet. The money is still coming in. Coinbase is now one of Mizuho Markets Cayman’s larger holdings after the company recently acquired 150,000 shares, or about $34 million. Nearly 69% of the business is owned by institutional investors. It’s difficult to ignore the discrepancy between the depressing headlines and the real purchasing habits of those who work as real money managers.
I believe that what Coinbase is attempting to become is a part of the wager. Founded in San Francisco fourteen years ago as a straightforward Bitcoin store, it now aspires to be something more bizarre and expansive. It introduces perpetual-style equity index futures that track defense, China, AI, and a tech index in June. The management continues to use the term “everything exchange.” There’s also a more subdued tale about USDF, a brand-new dollar-backed stablecoin based on Solana, and the potential for direct access to Federal Reserve payment rails.
The question is completely altered if that final component occurs. Coinbase transforms from a cryptocurrency wager into a payments-and-settlement wager that is integrated into the real American financial system. Analysts are likely dispersed between $107 and $400 because that is a much more difficult item to value.
As of right now, the technicals point to a range-bound drift between $182 and $200, with a slight preference for the downside. As I watch this play out, the truth is that no one knows. Tesla overcame years of skeptics who thought it was done. Bitcoin won’t stand still, Coinbase isn’t making money this quarter, and the layoffs hurt. However, the company continues to grow, and a strong close above $200 could be the first indication that things are changing. Whether that occurs this summer or much later is still up in the air.
