Benchmark Cuts Coinbase Target to $285 but Sees “Maturity Milestone” in Fundamentals

Benchmark has lowered its price target on Coinbase from $450 to $285, a 37% reduction, while maintaining a Buy (Speculative Buy) rating.

The adjustment reflects broader compression in crypto equity multiples following the October 10, 2025 “10/10” market crash and softer trading volumes compared to the mid-2025 peak, rather than a deterioration in the company’s operational trajectory.

Lead analyst Mark Palmer described Coinbase’s current phase as a “maturity milestone,” arguing that the firm’s revenue base is becoming structurally more durable despite cyclical market pressure.

Why the Price Target Was Reduced

The revised $285 target accounts for lower valuation multiples across the crypto sector after the 2025 liquidation event, which reshaped risk appetite and compressed growth premiums. Trading volumes have also moderated from 2025 highs, reducing near-term transaction-driven upside assumptions.

The downgrade in target price does not signal a shift in long-term conviction. Instead, Benchmark recalibrated valuation expectations to reflect a more normalized multiple environment following volatility compression and reduced speculative activity.

Revenue Mix: From Retail Fees to Institutional Infrastructure

Benchmark’s central thesis is that Coinbase is increasingly decoupling from reliance on retail trading fees. Institutional volume now consistently exceeds retail volume, creating a more stable, though lower-margin, transaction base.

More notably, subscription and services revenue now accounts for nearly 40% of total net revenue, up from roughly 25% two years ago. This category includes:

• Staking revenue
• Custody fees tied to Bitcoin and Ethereum ETFs
• Sequencer fees from Base, Coinbase’s Layer 2 network

The shift toward recurring, infrastructure-linked revenue reduces sensitivity to short-term retail speculation cycles.

Regulatory and Operational Factors

Benchmark also cited improving regulatory clarity as a structural positive. With coordination efforts between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), alongside initiatives such as “Project Crypto,” the firm believes Coinbase’s long-standing legal overhang is easing.

Reduced uncertainty lowers the probability of abrupt enforcement actions or disruptive fines, which historically weighed on valuation multiples.

Operationally, Coinbase has integrated AI-driven customer support and streamlined engineering processes. According to Benchmark, these adjustments have preserved profit margins even as Bitcoin prices corrected in early 2026.

Earnings Context and Market Position

The revised outlook followed Coinbase’s Q4 2025 earnings call, where the company reported its fourth consecutive profitable quarter. Analysts noted that while the speculative “hype” premium attached to crypto equities has faded, the company’s structural utility within the financial system has strengthened.

Palmer summarized the transition succinctly, stating that the Coinbase of 2026 is no longer defined primarily by trading activity but by its role as a bridge between traditional U.S. finance and on-chain infrastructure.

Structural Takeaway

Benchmark’s adjustment reflects a valuation reset rather than a fundamental downgrade. The compression in target price acknowledges macro and sector-wide multiple contraction, while the maintained Buy rating signals confidence in Coinbase’s evolving revenue durability and institutional integration.

As retail-driven volatility recedes, the company’s infrastructure positioning, spanning custody, staking, Layer 2 operations, and institutional flows, appears increasingly central to its long-term investment thesis.

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