Haverhill Financial Research · October 12, 2026
Summary: Haverhill price target $170 (12 months)
Coinbase still earns about half its revenue from trading fees, and trading has slowed sharply: transaction revenue fell 22% from a year earlier to $599 million in the second quarter of 2026, and July ran at a weaker pace still. The other half, led by its share of interest on USDC reserves, has held up better but is exposed to falling interest rates. At $179.39 the shares already price in a partial trading recovery, and our 12-month price target of $170 (through October 2027) sits about 5% below the current price, so we rate the shares Hold.
Coinbase filings through the Q2 2026 Form 10-Q; Haverhill Financial Research model; price as of Nasdaq close Oct 9, 2026
Trading still sets the tone. Transaction revenue was $599 million in Q2 2026, down 22% year over year, with consumer fees down 30%. Coinbase said July brought in only about $130 million through July 26.
USDC is the second engine, and it runs on rates. Stablecoin revenue was $292 million, down 5% from a year earlier even though average USDC held in Coinbase products rose 44% to a record $20 billion.
Our view: the franchise is in good shape, with record 10.3% market share and $8.6 billion of cash, but the price already assumes trading recovers. We set a $170 target and rate the shares Hold.
Investment thesis in brief
Our thesis: Coinbase has built real non-trading income, but that income is tied to interest rates and crypto prices, so it softens in the same downturns that hit trading. The stock already prices in a moderate recovery.
What we like. Coinbase is gaining ground in a falling market. Its share of global crypto trading volume reached a record 10.3% in Q2 2026, up from 9.1% in Q1. Institutional transaction revenue rose 65% year over year to $100 million, and prediction markets reached more than $100 million of annualized revenue. Management cut its 2026 expense range and trimmed headcount from 4,988 to 4,321 in one quarter.
What the market may be missing. Subscription and services revenue is less steady than the label suggests. It fell 12% from a year earlier to $555 million in Q2, because staking income (blockchain rewards) dropped 42% with lower token prices and stablecoin income slipped as rates fell.
What holds us back. Total revenue was $1.22 billion in Q2, down 19% from a year earlier, and Coinbase posted a GAAP net loss of $359 million. July's transaction revenue pace points to a weaker third quarter.
How does the business actually make money?
Coinbase reports two main revenue lines. In Q2 2026, transaction revenue (fees on trades) was $599 million, or 52% of net revenue. Subscription and services revenue was $555 million, or 48%. A further $66 million of "other revenue", mostly interest on Coinbase's own cash, brings total revenue to $1.22 billion.
Trading fees. Retail customers paid $452 million in Q2 on $25.8 billion of consumer spot trading, an effective fee of about 1.75% (Haverhill calculation). Institutions paid $100 million on a much larger base, including derivatives through Deribit, the crypto options exchange Coinbase owns. Derivatives volume was $1,027 billion in Q2, seven times spot volume, but earns far less per dollar traded. Other transaction revenue, $47 million, includes Base, Coinbase's own blockchain network.
Subscription and services. The largest piece is stablecoin revenue, $292 million in Q2. USDC is a dollar-backed token issued by Circle; the reserves earn interest, and Coinbase receives a share. Coinbase says it captured about 50% of all USDC economics over the past year, and that its agreement with Circle will renew on the same terms. Blockchain rewards, Coinbase's cut of staking income it earns for customers, brought in $83 million. Interest and finance fee income added $66 million, and the rest, $114 million, includes Coinbase One subscriptions and custody fees.
What do the numbers say?
Transaction revenue has fallen in three straight quarters, from $1,046 million in Q3 2025 to $599 million in Q2 2026. Subscription and services revenue fell less, so its share of net revenue rose from 45% a year earlier to 48%.
Exhibit 1: trading fees have fallen for three straight quarters
Three things investors should know.
Fee rates held while volumes fell. Consumer spot volume fell 24% from Q1 to Q2, while consumer revenue fell 20%. The total crypto spot market fell 25% over the same period.
USDC grows on Coinbase, while the income shrinks. Average USDC held in Coinbase products hit $20 billion, against an average USDC market value of $77 billion. Annualized, Q2 stablecoin revenue equals about 1.5% of that $77 billion (Haverhill calculation), so each quarter-point cut in rates removes roughly $95 million a year if Coinbase keeps half the reserve income (our estimate).
Costs are coming down, but not as fast as revenue. Adjusted expenses were about $1.0 billion in Q2, down 9% from Q1, and Coinbase guides $4.20 billion to $4.45 billion for 2026. Adjusted EBITDA, a cash-style profit measure that excludes stock pay, was $208 million, down from $512 million a year earlier. The adjusted net loss was $105 million.
Balance sheet. At June 30 Coinbase held $8.6 billion of cash against $5.9 billion of long-term debt, after repaying a $1.3 billion convertible note in June. Coinbase bought back 7.1 million shares for $1.18 billion in the first half and has about $2.0 billion of authorization left.
Competition and moat
Coinbase's edge is trust and regulatory standing in the US, which matters most to institutions and to retail customers who want a familiar app. It lifted its share of global crypto trading to a record 10.3% in Q2 while the market shrank.
Who it competes with. Offshore exchanges compete on price and product range. US brokerages that added crypto trading compete for the same retail customers with lower headline fees. Decentralized exchanges, which let users trade directly from their own wallets, take a growing share of activity; Coinbase now routes customers to them through its app and Base.
Where the moat is real. Coinbase's USDC arrangement gives it income from stablecoins held well beyond its own platform: $57 billion of the $77 billion average USDC supply in Q2 sat off Coinbase. Its custody and prime services for institutions are hard to replicate.
Where it is thin. A retail fee of about 1.75% per trade is far above stock-broker pricing, and cheaper rivals press on it. The USDC income depends on a contract with Circle and on short-term interest rates, neither of which Coinbase controls.
What is it worth?
We value Coinbase at $170 per share over the next 12 months (to October 2027), a probability-weighted blend of three scenarios. That is about 5% below today's price, within the 15% band for a Hold.
Our method. Coinbase's profits swing too much with crypto prices for an earnings multiple, so we use revenue:
Forecast calendar 2027 revenue by line: transaction, subscription and services, and other.
Apply an enterprise value to revenue multiple (company value including debt, divided by sales) that we think investors will pay in October 2027.
Add about $2.7 billion of net cash ($8.6 billion of cash less $5.9 billion of debt; we give no credit for crypto holdings) and divide by about 270 million diluted shares (our estimate).
Weight the cases 25% bear, 50% base and 25% bull.
Why these numbers. Our base case of $5.0 billion assumes transaction revenue of $2.4 billion, about the Q2 2026 quarterly rate held for a year, subscription and services revenue of $2.3 billion, about $575 million a quarter and inside Coinbase's Q3 guide of $500 million to $580 million, and $0.3 billion of other revenue. The bull case returns to 2025 revenue of $7.2 billion. The bear case holds trading a little below July's pace. Our 8.5x base multiple is a little below the roughly 9x the market now pays on Q2 revenue annualized (Haverhill calculation), reflecting lower rates ahead.
What the price implies. At $179.39 Coinbase's equity is worth about $47 billion, or about $45 billion net of cash. That is 6.2 times 2025 revenue and about 9 times Q2 2026 revenue annualized. Each turn of the multiple is worth about $18 a share on our base-case revenue.
What are the real risks?
Ranked by how much each would move our value per share.
Trading stays weak. July's transaction revenue pace of about $130 million in 26 days implies a quarter near $450 million if it holds (Haverhill calculation), a quarter below our base case.
Interest rates fall faster. Stablecoin revenue already fell 5% year over year while USDC balances on the platform grew 44%. Lower rates also cut interest income on customer cash and Coinbase's own cash.
Retail fees get cut. Consumer revenue was $452 million in Q2. Competition from low-fee brokers and on-chain exchanges could force Coinbase to lower its rate of about 1.75%.
Crypto prices fall further. Assets on the platform dropped to $246 billion from $425 billion a year earlier, which cuts staking and custody income, and mark-to-market losses on Coinbase's own crypto drive GAAP losses.
USDC loses ground. Coinbase's largest services line depends on USDC's share of stablecoins and on its Circle agreement, which Coinbase says will renew on the same terms.
What would change our mind?
Our Hold rests on the view that trading recovers only gradually while services income stays roughly flat. These signals would prove that wrong.
Signals that would move us to Sell
Q3 transaction revenue below $400 million and subscription and services below the $500 million low end of guidance.
Average USDC held in Coinbase products falling below $18 billion.
Adjusted EBITDA turning negative in any quarter, ending a run of 14 positive quarters.
Signals that would move us to Buy
Consumer spot volume back above $40 billion in a quarter, up from $25.8 billion in Q2.
Subscription and services revenue above $600 million despite lower rates.
The price falls below about $148 with no change in our value.
Catalysts to watch
Q3 2026 results, expected late October or early November (Coinbase had not announced the date as of October 9).
Deribit for US customers. Coinbase lists unified global derivatives liquidity for US and international customers as coming soon.
Prediction markets. Coinbase plans combination bets and tools for active traders after revenue more than doubled in Q2.
Q4 2026 results and 2027 expense outlook, expected around February 2027 (our estimate based on past timing).
Sources and disclosures
Every company figure in this report comes from Coinbase's own filings and releases, linked below. The analysis, model and price target are Haverhill Financial Research's own work.
Disclosures. Haverhill Financial Research is a publisher of general financial commentary. This report is not personalized investment advice and does not consider any reader's financial situation; readers should do their own research. Price targets are estimates of value, not guarantees. Haverhill ratings follow our published bands: Buy when our 12-month target is at least 15% above the price, Sell when it is at least 15% below, Hold in between. The author of this post does not hold a position in COIN. Data as of October 9, 2026.
