When Tariffs and Crypto Collide: A Most Unfortunate Affair! 😅

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What to know:

  • Oppenheimer, in a most disheartening turn of events, has lowered Coinbase’s 2025 trading volume estimate to a mere $1.3 trillion from the previously anticipated $1.6 trillion.
  • It appears that the specter of recession, linked to President Trump’s whimsical tariff policies, has cast a pall over retail trading, much to the chagrin of analysts.
  • Despite Coinbase’s market share swelling to a commendable 69% of U.S. spot crypto trading, the clouds of macroeconomic uncertainty loom ominously over future growth.

In the realm of crypto exchanges, Coinbase (COIN) finds itself in a rather precarious position, as the uncertainties wrought by President Donald Trump’s capricious tariff threats have darkened the prospects for retail crypto activity, as noted by the esteemed analysts at Oppenheimer.

With a heavy heart, the investment bank has slashed its full-year trading volume forecast by a staggering 19%, now predicting a paltry $1.3 trillion, and has also reduced its first-quarter estimate to $380 billion, a decline of 13% from the previous quarter, as the appetite for risk has waned considerably.

Despite the generally more supportive tone emanating from Washington—replete with pro-crypto signals from the White House, Congress, and regulators—the analysts lament that the market has yet to fully embrace this shift. Oh, the irony! 🤦‍♂️

“Since the election, we have witnessed the most pro-crypto President, Administration, Congress, and regulators, all signaling to the world that the US is open for blockchain businesses to attract capital, projects, and talents,” quipped analyst Owen Lau. “Yet, it is most unfortunate that Trump’s on-and-off tariffs have instigated bear market concerns, recession fears, and a retreat from retail trading.”

Alas, Coinbase stock has plummeted by 30% this year, underperforming even bitcoin (BTC) and the S&P 500, which have seen declines of 10% and 8%, respectively. While these figures may seem like a silver lining compared to the 2022 downturn—when COIN plummeted by a staggering 86%—they still underscore the platform’s sensitivity to broader macro signals. How delightful! 🙄

Oppenheimer has also revised its forecasts for 2025 and 2026, lowering its revenue and earnings expectations, and has cut its share price target to $279 from $388, citing that retail participation may remain subdued amidst the prevailing policy uncertainty. It has, however, maintained an outperform rating on the shares, which fell by 1.2% to $173.39 on this fine Wednesday.

On a brighter note, Coinbase has managed to capture 69% of U.S. spot crypto trading volume in February, gaining ground against rivals such as Robinhood (HOOD). Whether it can maintain this lead will depend on the market’s ability to shake off tariff jitters and regain its momentum. Fingers crossed! 🤞

Despite the immediate hurdles, Oppenheimer remains optimistic about Coinbase’s long-term potential. “As a focused leader in crypto with optionality in tokenization and payments use cases, we believe COIN can command a premium. In our view, COIN is a strong rebound stock if/when tariff tensions deescalate,” Lau concluded with a hint of hope.

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2025-04-16 18:09