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- Coinbase shares appear risk-free after falling nearly 26% from their March highs, William Blair analysts said.
- Analysts argued that weaker trading volumes have already been priced in, while growing USDC adoption is improving the broader outlook for Coinbase and Circle.
Coinbase may be entering earnings season from a weaker position on the chart, but that’s exactly why some analysts say the stock now looks less risky, not more.
William Blair analysts Andrew Jeffrey and Adeeb Chowdhury He said Their expectations for Coinbase were reset after shares gave up much of the previous rebound in the first quarter. Since peaking in March, the coin has fallen about 26%, a move analysts say has already absorbed much of the disappointment associated with softer trading conditions.
Softer trading feels less like a shock than a known problem
This is the essence of the call. Coinbase is still facing weaker volumes and lower transaction revenue, but William Blair’s point is that investors already know that. Analysts noted that these trends have been below estimates for most of the year, making the potential downturn look more like a late adjustment than a new negative surprise.
In this context, first-quarter earnings may be less important to sentiment than they would normally be. Coinbase is expected to report on May 7, but William Blair noted that the weaker results are unlikely to materially change the market mood because the reset has largely already occurred.
This is not the same as saying the quarter will be strong. Expectations have been lowered enough for weak numbers to fall less strongly.
USDC is becoming more important to the Coinbase story
The most positive part of the outlook comes from stablecoins, specifically USDC. Increasing reliance on the underlying Coinbase, William Blair said Stable coin It improves setup not only for Coinbase but also for Circle.
This is important because Coinbase’s business is no longer governed solely by trading activity. Clearly, transaction revenue is still important, but the company is trying to expand its revenue base through subscriptions, services, and the stablecoin economy.
USDC fits well into this shift. If trading remains weak, the growing stablecoin business gives Coinbase another way to keep investors focused on long-term income generation rather than quarter-to-quarter volume swings. For now, this appears to be enough for William Blair to claim that much of the near-term risk has already been taken out of stocks.
