Compass Point Warns Coinbase Faces Perps Competition

Compass Point reiterated a ‘Sell’ rating and a $140 price target for Coinbase in a Monday note, saying the exchange faces stronger competition in perpetual futures after the Commodity Futures Trading Commission allowed its Deribit unit to link U.S. customers to offshore perps.

On Friday the CFTC granted relief that lets Coinbase route American customers to the global perpetual futures market through Deribit. Coinbase acquired Deribit last year for $2.9 billion. Perpetual futures are contracts with no expiration date that use periodic funding payments to track underlying asset prices and allow positions to be held indefinitely.

Coinbase reported $50 million in first-quarter revenue from perpetual futures while revenue from retail spot trading fell to its lowest level since the third quarter of 2024. Compass Point flagged those figures as a sign that new derivatives offerings may be drawing volume away from other business.

The analysts cited recent regulatory and product developments that could increase competition: the CFTC approved Kalshi to offer Bitcoin-linked perps, the CME moved to around-the-clock Bitcoin futures and options trading, and other platforms are expanding or launching perpetual products. They also noted integration of related markets at large brokerages and upcoming perp offerings from several exchanges. Offshore venues including Binance and access to markets such as Hyperliquid were identified as additional sources of competition.

Compass Point wrote, “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.” The analysts added they expect U.S. leverage limits to keep domestic perp volumes lower than offshore markets.

Shares of Coinbase were trading around $184 midday, down about 2.6% from the prior close. Compass Point maintained its Sell rating and $140 target, citing competitive pressures and constrained pricing power in derivatives as the basis for the call.