Coinbase (COIN.O), the cryptocurrency exchange, continues to beat expectations with its earnings reports. Its early start as the only publicly traded crypto exchange gave it a big edge. However, Wall Street analysts said on Friday that this advantage might not last as new rules make the market clearer and more companies go public.
The global crypto market has grown massively, now worth $3.7 trillion. Both big financial firms and everyday investors are investing in digital assets. President Donald Trump, who took office in January, has made it easier to navigate U.S. crypto regulations. This helped Bitcoin reach record highs and enabled major industry players to list on public stock markets.
Analysts at Morningstar, a brokerage firm, believe that clearer rules for cryptocurrency and stablecoins will boost trading volume. But they also warned that this will likely bring more competition. Coinbase’s higher prices will likely come under increasing pressure.
Already, new competitors are emerging. Gemini (GEMI.O), the crypto exchange started by Tyler and Cameron Winklevoss, listed on the Nasdaq in September. Rival company Bullish (BLSH.N) went public in August. Kraken, another big name, is reportedly getting ready to list its shares in the first half of 2026.
This growing list of public crypto exchanges shows that the market is becoming more mature. It also presents the biggest challenge yet to Coinbase’s leading position. Piper Sandler analysts noted that Coinbase has built a reputation as the most trusted crypto company for big institutions worldwide. But they remain cautious about how retail investors will act, citing increased competition and recent comments from management indicating that customers want to trade more than just crypto.
Coinbase is currently the third-largest crypto spot exchange globally, according to CoinMarketCap, sitting behind Binance and Bybit. The company still performed well, beating Wall Street’s third-quarter profit forecasts on Thursday, thanks to a big jump in trading volume.
After the earnings report, Coinbase CEO Brian Armstrong said that clearer rules in the U.S. and around the world are helping the crypto sector grow. But he also admitted that this means “lots of new competition is coming in and so we need to make sure we’re executing well.”
Coinbase has been busy expanding its product lineup through several recent acquisitions. This includes a $2.9 billion deal for derivatives exchange Deribit in May and the purchase of investment platform Echo for $375 million earlier this month.
CFO Alesia Haas also mentioned, “we’ve always faced competition,” and highlighted that Coinbase has continued to increase its market share, size, and trading volume. Analysts expect Coinbase to keep buying up other companies. J.P. Morgan analysts said, “We think the M&A door remains very much open for future acquisitions and strategic investments.” They believe Coinbase is well positioned to make competitive offers as an active buyer, given its market leadership and strong industry and government relationships. Coinbase’s shares were up 5% in premarket trading.
