Headline: Analysts say Coinbase’s near‑30% drop is priced in — here’s why they’re not panicking
Coinbase and Circle climbed roughly 3–4% on Wednesday even after William Blair cut its revenue and earnings forecasts for Coinbase — a reaction that underlines a common theme among analysts: the worst of the pain may already be reflected in the shares.
What William Blair changed
- The Chicago-based bank downgraded Coinbase’s 2026 revenue estimate by 12% and 2027 by 13%, and slashed adjusted EBITDA forecasts by 34% for both years. Still, it kept an “outperform” rating and urged investors to remain involved.
- Analysts Andrew Jeffrey and Adib Choudhury expect Coinbase’s earnings to trough in the second half of 2026 and recover in 2027. William Blair projects total trading volume will drop about 44% this year to $669 billion, then rebound more than 32% in 2027.
- Their bullish case rests on structural changes since 2022: spot Bitcoin ETFs exist now, institutional flows are larger, and the regulatory landscape has matured — factors they say should support a stronger long‑term recovery.
Where growth could come from
- William Blair highlighted Coinbase’s Base layer‑2 network as a potential big earnings driver, with retail derivatives and prediction markets adding diversification beyond spot trading. Retail derivatives already annualized above $200 million in Q1, the note said.
Near‑term caution from some corners
- Not everyone is upbeat. Piper Sandler’s Patrick Moley cut his Coinbase price target to $155 from $170 and kept a “neutral” rating, flagging prediction markets and perpetual futures as Q2’s big story and warning of “significant investor attention on the perpetual future threat” heading into Q3.
- Market moves reflect real pain: Coinbase is down nearly 30% this year, roughly in line with Bitcoin’s ~26% decline. Circle, which IPO’d at $31 in June 2025, is off about 20% since January.
Technical and on‑chain signals that temper the pessimism
- Veteran technical analyst John Bollinger has been tracking a developing “W” double‑bottom pattern on Bitcoin’s daily (and weekly) charts since early July — a fractal setup of nested bottoms that, if completed, he says would be “a confirmation of a change in trend.” Bollinger also disclosed a long Bitcoin position via his investment vehicle earlier this year.
- Glassnode’s weekly on‑chain analysis shows long‑term holder capitulation — the main source of selling pressure this cycle — peaked about two weeks ago and has begun to retreat. An adjusted metric that filters internal transfers hit a cycle high and is now falling, and the June lows saw broad accumulation across wallets of all sizes.
Macro context and the missing ingredient
- Bitcoin’s inverse relationship with the dollar has grown, its correlation to U.S. equities has eased, and it’s become more sensitive to positive macro surprises — Tuesday’s soft inflation print moved Bitcoin more than any major equity index.
- Still, both Wall Street and on‑chain analysts emphasize the same sticking point: no sustained, spot‑driven buying has yet confirmed a durable recovery. Derivative positions are unwinding, long‑term selling is thinning, and options fear is easing, but fresh capital hasn’t fully arrived.
Bottom line
Analysts arguing against panic point to a lot of the downside being priced in, new structural tailwinds (ETFs, institutional flows, Base L2) and improving on‑chain signals. The timing, however, remains uncertain: William Blair sees a meaningful inflection in 2027, when trading volumes could rebound after this year’s expected slump. For now, investors are left weighing near‑term risks against potentially stronger fundamentals farther out.
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