Prediction markets and derivatives drive Bernstein's crypto stock outlook for Coinbase, Robinhood and Circle

What happened

Bernstein kept Outperform ratings on Coinbase, Robinhood and Circle ahead of third-quarter earnings. It cut Coinbase's price target to $250 from $330, citing weaker crypto trading volumes, and raised estimates for Robinhood's revenue and Circle's earnings.

Confirmed

Global impact / market context

The split view means Bernstein expects Coinbase's revenue to shift toward prediction markets, derivatives and stablecoins as spot crypto trading stalls, while Robinhood and Circle keep growing. This changes how investors weigh each company's reliance on trading activity versus other fee sources.

Analyst inference

Coinbase shares trade just above $162 and are down more than 31% this year, showing investors already expect weaker trading. Bernstein's Coinbase cuts and Robinhood and Circle upgrades suggest money may rotate toward companies with steadier revenue as crypto trading stays flat.

Analyst inference

What to watch

1. Bernstein expects spot trading to stagnate at $150 billion in the third quarter, with stablecoin revenue as the biggest factor for Coinbase's revenue growth. Confirmed
2. Bernstein expects prediction markets and derivatives products on Coinbase to generate roughly $2 billion in revenue by 2028, up from around $600 million earlier this year. Confirmed
3. Watch whether Coinbase's prediction markets and derivatives revenue actually grows toward Bernstein's $2 billion 2028 estimate, since that growth is what offsets the weaker spot trading outlook. Analyst inference

Evidence

• theblock.co