Can Coinbase Stock Fall Another 40%?

For questions about this article or underlying research, email help@trefis.com.

Coinbase Global (COIN) stock frequently experiences deep drawdowns. In four of the past five calendar years, the shares dropped 40% or more from one closing price to another within the same year. Another 41% drop from current levels would push the stock back to $85.80. That price marks its lowest close in three years, recorded on November 3, 2023. Shareholders now have to consider whether internal business factors could trigger a similar drop, and management flagged a shift during its latest earnings call. So what has started to shrink at Coinbase?

What Did Coinbase Say Is Shrinking?

Outright cryptocurrency trading is slowing among Coinbase customers. During the October 29, 2026 call, management said that overall crypto spot trading volume dropped 10% in Q3 FY2026 compared to the previous quarter. Executives brought up the decline themselves as the discussion shifted toward prediction markets.

This weakness in spot volume compounds a broader revenue slump. Revenue has fallen below its year-earlier level in each of the last four quarters. The company generated $1.22 billion in Q3 FY2026 revenue, a 35.0% decline from the previous year. Coinbase previously weathered a similar contraction when revenue dropped 45.0% over the twelve months ended September 2023. On that same twelve-month basis, revenue is down 26.6% over the four quarters ended September 2026.

How Much Of Coinbase’s Revenue Comes From Trading?

Trading accounts for about half of revenue at most. Management said that subscription services generated roughly 49% of total net revenue in Q3 FY2026, leaving trading and other revenue to supply the balance. Prediction markets and derivatives collectively accounted for about 25% of transaction revenue. The remaining portion flowed from other trading activities, including the spot market.

You cannot know yet whether prediction markets will continuously bridge the gap. The company launched prediction markets in February 2026, and the product surpassed $200 million in annualized revenue during Q3. Management said this expansion offset the drop in spot trading to keep revenue flat compared to the previous quarter. Executives also said that customers are directing incremental dollars toward prediction markets and derivatives instead of pulling funds out of spot trading. Against that, the offset applies to just one quarter, and spot volume still fell.

The shares are not as cheap as their drop might indicate. Coinbase stock closed at $145.45 on November 3, 2026, sitting 56.0% below its highest closing price of the past year. Yet it still trades at 6.8 times sales, compared to 3.2 for the S&P 500. Even after the decline, that valuation appears to assume Coinbase will return to growth.

Coinbase Stock Falls Further Than The Market In Shocks

In each of the five recent market shocks, the stock fell more than twice as far as the S&P 500. The shares dropped 41.0% during the 2025 tariff shock, while the index lost 19.0%. During the 2022 inflation shock and Fed tightening, the stock fell 81.0%, compared to a 24.0% decline for the index.

The worry has merit, and the latest quarterly results already reflect part of it: customers are trading less crypto outright. The stock also has a history of falling much further than the market when conditions turn. So far, prediction-market growth has made up for the weaker spot trading in only one quarter.

Spot crypto trading volume, measured against the growth in prediction markets, is the measure to watch when Coinbase next reports. The company is expected to release those results in February 2027.

Does This Mean You Should Act On COIN?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.

Spot an error or want more like this? Tell us in 10 seconds.