Sell Coinbase Before Derivatives Squeeze Crypto Giant, Says Compass Point
Coinbase’s push into crypto derivatives faces strong competition and limited pricing power, especially in perpetual futures trading. Analysts at Compass Point said low switching costs, depressed market conditions, and a growing set of rivals should cap revenue growth from leverage-based products. Coinbase recently gained CFTC relief to offer U.S. users access to offshore perps through Deribit, but competitors including Kalshi, CME, Interactive Brokers, Kraken, and Robinhood are expanding similar offerings. Compass Point also sees signs of cannibalization, noting Coinbase’s $50 million in first-quarter perps revenue alongside retail trading revenue falling to its lowest level since Q3 2024. The firm warned that future CFTC approvals for offshore venues or platforms like Hyperliquid and Binance could weaken Coinbase’s U.S. market share and long-term pricing power. Compass Point kept a Sell rating and $140 target.
