Compass Point Raises Target but Maintains Sell Rating on Coinbase as Share Volatility Persists

Compass Point has lifted its price target on Coinbase Global, Inc. (NASDAQ:COIN) while reiterating a bearish stance on the cryptocurrency exchange operator, underscoring the firm’s view that recent market momentum is insufficient to offset the stock’s history of sharp swings.

The investment firm increased its 12-month target to $277 from $248 on October 20, 2025, citing a broader rally in digital assets during August. Despite the higher target, Compass Point left its Sell rating unchanged, highlighting what it described as “persistent volatility” in Coinbase shares. According to the firm, the stock has declined after each of the past five quarterly earnings releases, a pattern it expects could re-emerge when the company reports third-quarter results.

Compass Point projects that Coinbase will deliver revenue roughly 2 percent above its prior forecast for the September quarter, an outlook that excludes approximately $43 million in incremental revenue tied to the August acquisition of crypto-derivatives platform Deribit. Factoring in contributions from that deal, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to be about 3 percent higher than previously modeled, buoyed by an estimated $29 million boost from Deribit. The firm anticipates that most of the quarterly upside will stem from growth in Coinbase’s Subscription & Services segment, which includes staking fees, custodial revenue, and blockchain rewards.

Coinbase operates a global platform offering trading, custody, and on-chain infrastructure services to retail, institutional, and developer clients. The company’s core brokerage business allows users to buy and sell a range of digital assets, while its liquidity services facilitate large transactions for professional traders and corporate customers. Beyond trading, Coinbase provides wallet infrastructure, developer tools, and staking options designed to support broader blockchain adoption.

Despite these capabilities, Compass Point warned that the stock’s price remains vulnerable to abrupt shifts in trading volumes and crypto-asset prices. Historical trading data show that Coinbase shares have exhibited wide intraday ranges and have often reacted sharply to macroeconomic headlines and regulatory developments. The investment firm added that such volatility complicates valuation and clouds the near-term risk-reward profile for investors.

The market’s caution has not deterred hedge funds from taking positions. Coinbase recently appeared on a list of the 12 most promising blockchain and crypto mining stocks favored by hedge funds, reflecting continued institutional interest in the sector. According to filings available through the U.S. Securities and Exchange Commission, several large managers added or initiated stakes in Coinbase during the latest reporting period, lured by the potential for outsized returns if digital-asset adoption accelerates.

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Even so, some market participants view alternative areas of technology as offering more attractive upside with lower downside risk. Compass Point noted that certain artificial-intelligence (AI) companies could provide superior growth prospects, particularly those positioned to benefit from shifts in trade policy and domestic manufacturing initiatives. While Coinbase remains a liquid proxy for crypto market sentiment, the firm suggested that exposure to AI could deliver a more balanced risk profile for investors wary of crypto’s volatility.

Coinbase’s next earnings report will serve as the first comprehensive snapshot of the Deribit acquisition’s impact, as well as a test of whether the Subscription & Services momentum can offset potential softness in retail trading volumes. Management has emphasized diversification beyond transaction revenue, but the company still derives a significant share of its top line from trading fees that fluctuate with crypto prices and investor engagement.

Looking ahead, Compass Point’s analysts indicated they will monitor regulatory developments, changes in retail trading activity, and integration progress with Deribit to assess whether Coinbase can sustain revenue growth against a backdrop of heightened market scrutiny. For now, the firm’s updated model supports a higher price target but stops short of endorsing the stock, citing the same volatility that has weighed on performance following previous earnings cycles.

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