Wall Street analysts are issuing warnings and downgrades for major cryptocurrency companies as trading activity cools significantly in early 2026, threatening first-quarter profitability across the sector. Barclays downgraded Coinbase (COIN), citing that "global crypto trading activity has declined to a level not seen since the end of 2023" and warning that profitability is under pressure without a near-term resurgence.
The data reveals a stark slowdown. Coinbase's March trading volume was the lowest since September 2024, with April showing no improvement. Barclays estimates Q1 volumes fell roughly 30% from the prior quarter, directly impacting revenue as exchanges rely on transaction fees. The bank's forecast for Coinbase's adjusted EBITDA is about 24% below consensus, driven by weaker spot trading and retail activity.
Oppenheimer also cut its forecasts, reducing its Coinbase volume estimate to $211 billion for Q1 from $244 billion and expecting total revenue of $1.48 billion, below prior forecasts. The firm attributed the softer activity to declining crypto prices and broader economic uncertainty, noting that Wall Street estimates still haven't fully reflected the volume drop.
The reset extends beyond Coinbase. Rosenblatt downgraded Bullish (BLSH) earlier this week, while Compass Point downgraded Circle (CRCL) to "neutral" and "sell," respectively. While Circle expanded its USDC stablecoin network with market cap and transfer volume up 1% and 12% quarter-over-quarter, and Bullish saw strong on-platform activity tied to February volatility, spot volumes still missed expectations.
The core issue is a broad-based trading slowdown. Bitcoin lost over 22% of its value in Q1 2026, while ether was down 29%, contributing to reduced trader participation. Efforts to diversify revenue, like Coinbase's push into derivatives and tokenized assets, are viewed skeptically; Barclays wrote the strategy is "likely to take a long time to pay off." Stablecoin revenue also faces regulatory uncertainty in Washington.
Analysts are moving preemptively ahead of earnings season. Coinbase reports Q2 earnings on May 7, Bullish reports on April 23, and Circle has not yet announced a date.
