Coinbase Global (COIN) received a downgrade on Wednesday morning by investment bank Barclays, citing “profitability under pressure” ahead of the major US crypto platform’s first quarter earnings print.

Barclays downgraded Coinbase from Neutral to Underweight and lowered its price target to $140 from $148 per share. The forecast is below Coinbase’s current price and Wall Street’s consensus among the 38 analysts covering the company.

“Despite a pro-crypto President and a favorable regulatory environment, global crypto trading activity has declined to a level not seen since the end of 2023,” Barclays analyst Benjamin Buddish wrote in a note.

“While there are many strategic initiatives ongoing at Coinbase, we expect the decline in [trading] volumes will weigh on profitability, and with little valuation support we move shares to Underweight,” the analyst note added.

Read more: How to navigate a crypto meltdown

Markets rallied on Wednesday morning after the Trump administration announced a two-week ceasefire with Iran hours before a crucial deadline. Bitcoin (BTC-USD) and other digital assets have surged in a broader risk asset regrouping.

Shares of Coinbase rose as much as 6% early Wednesday morning to $186. The stock is down 20% since the beginning of the year.

In January, CEO Brian Armstrong sought to ease investor worries by pointing to the firm’s track record of weathering past downturns after Coinbase posted $215 billion in trading volume, its bread and butter business.

Barclays estimated that when Coinbase reports earnings in early May, it will post $196 billion in trading volume for the first three months of 2026. Based on data collected by the Block, monthly crypto trading volume in March slumped to its lowest level in over two years across the crypto spot market.

For over a year, the Trump administration has pushed to open the crypto world to mainstream finance, leaving Coinbase as a key beneficiary. The company has the ambition to become an “everything exchange,” catering to all imaginable financial trading needs.

More recently, Coinbase’s future has looked less certain as it juggles a battle in Washington against the banking industry amid a months-long slide in the crypto markets,

Coinbase unveiled a flurry of new products and services beyond crypto, including plain vanilla stock trading, an automated wealth advisory, and prediction markets.

“We understand the strategy of attempting to become the ‘everything exchange,’” but given the fierce competition in those other asset classes, Barclays argued it sees “little ‘right to win’” for the major crypto trading venue.

Investors are also eagerly awaiting the end of negotiations between the crypto and banking industry over whether third-party crypto platforms like Coinbase can pay customers yields and other rewards on their stablecoin balances.

That lobbying clash has stalled a key crypto bill that would establish a federal framework for regulatory jurisdiction over US crypto markets, spurring the White House to step in as mediator.  On Wednesday, a White House report from the Council of Economic Advisors found that banning crypto platforms from offering these payouts would not have a meaningful effect on banks’ lending capabilities.

Interested parties are currently deliberating over a new bill language that would potentially ban firms like Coinbase from giving customers payouts on their idle stablecoin balances, according to three sources familiar with the matter.

Coinbase earns revenue from its partnership with stablecoin issuer Circle (CRCL). Banning payouts on idle customer balances would allow the company to retain more of that revenue share. However, such a move would also eliminate a key use case for the digital asset “to kickstart retail adoption,” Barclays argued.

David Hollerith covers the financial sector, ranging from the country’s biggest banks to regional lenders, private equity firms, and the cryptocurrency space.

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