Why did Compass Point keep a Sell rating on Coinbase (NASDAQ: COIN)?

Compass Point maintained a Sell rating and a $140 price target because it believes competition in crypto derivatives is increasing rapidly. The firm argues that Coinbase may struggle to maintain pricing power and market share as more rivals enter the perpetual futures market.

What is Compass Point's price target for Coinbase stock?

Compass Point reiterated a $140 price target for Coinbase shares. With Coinbase trading around $184 when the report was published, the target implies meaningful downside from current levels.

What are perpetual futures and why are they important for Coinbase?

Perpetual futures, often called perps, are derivative contracts that allow traders to hold leveraged positions without an expiration date. They are one of the largest revenue-generating products in global crypto markets, making them a key growth area for Coinbase.

How much revenue is Coinbase generating from perpetual futures?

Coinbase generated approximately $50 million in perpetual futures revenue during the first quarter. While this shows growing demand for derivatives products, analysts question whether the growth is large enough to offset pressures elsewhere in the business.

Why does Compass Point think Coinbase faces growing competition?

The firm points to expanding competition from platforms including Kalshi, Kraken, Robinhood, CME, Binance and Hyperliquid. As more venues offer perpetual futures, traders can easily switch platforms, making it harder for Coinbase to charge premium fees.

What role does Deribit play in Coinbase's derivatives strategy?

Coinbase acquired Deribit for $2.9 billion to strengthen its position in crypto derivatives. The exchange recently received regulatory approval to offer offshore perpetual futures to US customers through the Deribit platform.

What does cannibalisation mean in Coinbase's business?

Cannibalisation occurs when a new product takes revenue away from an existing product instead of creating entirely new growth. Compass Point noted that while perpetual futures revenue increased, Coinbase's retail trading revenue fell to its lowest level since the third quarter of 2024.

Is Coinbase's derivatives expansion good or bad for investors?

The bullish view is that derivatives provide Coinbase with a large new revenue opportunity beyond spot trading. The bearish view is that intense competition and lower pricing power could limit profitability and reduce the long-term benefits of expansion.

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Compass Point flags Coinbase derivatives threat

Written by Mahathir BayenaPublished Jun. 2 2026

Compass Point maintained a bearish view on Coinbase, reiterating a Sell rating and a $140 price target as competition intensifies in the fast-growing market for cryptocurrency perpetual futures.

The investment bank said Coinbase’s derivatives expansion is unlikely to deliver significant long-term revenue growth because traders face low switching costs and an increasing number of competing platforms.

“Competition and low switching costs limit COIN’s ability to exert pricing power relative to spot trading, particularly among more sophisticated users that are most likely to trade these products,”

Compass Point analysts said.

The warning comes days after Coinbase received regulatory approval from the Commodity Futures Trading Commission to offer offshore perpetual futures to US customers through its Deribit subsidiary, which it acquired for $2.9 billion.

Compass Point noted that Kalshi has also received approval to offer Bitcoin-linked perpetual futures, while Kraken and Robinhood are preparing to launch similar products and CME is extending trading hours for its Bitcoin derivatives markets.

The analysts highlighted potential signs of cannibalisation within Coinbase’s business, noting that while perpetual futures generated $50 million in first-quarter revenue, retail trading revenue fell to its lowest level since the third quarter of 2024.

Additional risks could emerge if US regulators eventually allow greater access to offshore platforms such as Binance or decentralised venues like Hyperliquid, potentially increasing competition for Coinbase’s derivatives business.

At the time of reporting, Bitcoin price was $71,293.97.