The market is delivering a puzzling response to Coinbase’s exceptional third-quarter 2025 performance, creating what appears to be a textbook case of “buy the rumor, sell the news.” Despite posting outstanding financial results, the cryptocurrency exchange continues to face selling pressure from investors, leaving analysts searching for explanations behind this seemingly contradictory market behavior.
Analyst Optimism Contrasts With Market Reality
Market experts maintain a positive outlook on Coinbase’s prospects, with 17 out of 33 analysts rating the stock as “Strong Buy.” The average price target of $395.02 suggests potential upside of 18.2 percent from current levels. BTIG demonstrated even greater confidence, raising its price target to $420 while maintaining a “Buy” rating.
This professional optimism stands in stark contrast to the stock’s recent performance. Despite the positive analyst coverage, Coinbase shares have declined 17.6 percent over the past 30 days, extending a downward trend that persisted even after the company released impressive quarterly figures.
Record-Breaking Financial Performance
Coinbase’s operational metrics reveal a company firing on all cylinders. The platform generated record quarterly revenue of $1.9 billion, representing robust year-over-year growth of 55.1 percent. Even more impressive was the adjusted earnings per share of $1.44, which exceeded analyst expectations by a substantial 39.8 percent.
The revenue streams show balanced strength across business segments. Transaction revenue nearly doubled to $1.05 billion, fueled by heightened volatility in cryptocurrency markets. Meanwhile, subscription and service revenue demonstrated solid growth, advancing 34.3 percent to $747 million.
Should investors sell immediately? Or is it worth buying Coinbase?
Strategic Expansion and Operational Challenges
August 2025’s strategic acquisition of Deribit has proven particularly fruitful. The leading crypto options platform contributed $52 million to quarterly revenue while significantly expanding Coinbase’s derivatives capabilities. Combined derivatives trading volumes reached an astronomical $840 billion, highlighting the strategic value of this acquisition.
However, operational challenges persist. Total operating expenses remained elevated at $1.4 billion, despite registering a 9 percent quarterly decrease. The company’s workforce expanded by 12 percent to 4,795 employees—a development that represents both growth commitment and increased cost structure in uncertain market conditions.
Regulatory Hurdles and Future Outlook
Regulatory challenges continue to present headwinds for Coinbase. Traditional banking groups continue to block the company’s application for a trust charter license, creating uncertainty around future expansion plans. This regulatory resistance likely contributes to investor skepticism despite strong fundamental performance.
Looking ahead, management provided optimistic guidance for the fourth quarter, forecasting subscription revenue between $710 million and $790 million. October transaction revenue data suggests sustained trading activity, indicating underlying business strength continues despite the stock’s weakness.
The central question facing investors remains: when will market valuation align with Coinbase’s demonstrably strong operational performance?
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