Coinbase faces an uphill battle when it comes to derivatives as customers enjoy a growing number of ways to trade perpetual futures, according to analysts at Compass Point.
Amid depressed market conditions and competitors eyeing increased market share, Coinbase’s efforts to let customers speculate on digital assets using leverage will generate limited revenue growth, the investment bank’s analysts shared in a Monday note.
The analysts noted that Interactive Brokers, one of the world’s largest brokerages, has already integrated the prediction market alongside crypto exchange Bullish. At the same time, Kraken and Robinhood have announced that perps are rolling out soon.
On top of that, the analysts argued that there are signs of cannibalization because Coinbase notched $50 million in first-quarter perps revenue as revenue from retail trading fell to its lowest point since the third quarter of 2024.
As Coinbase faces competition within the U.S., Compass Point described the CFTC’s future approvals as potentially negative. The regulator’s ability to allow Americans to trade on Hyperliquid or offshore venues like Binance is among “growing risks,” the analysts wrote.
“We also expect leverage restrictions to limit U.S. perps trading relative to offshore markets,” Compass Point added. “As such, we view the U.S. regulatory expansion as a negative driver for COIN’s market share and pricing power longer-term.”
