Compass Point reiterates 'Sell' rating on Coinbase, citing derivatives fee war

Investment bank Compass Point has reaffirmed its "Sell" rating and $140 price target for Coinbase, arguing that the market outlook is bleak despite the company's recent U.S. CFTC approval for perpetual futures services through its subsidiary Deribit. The bank pointed to intensifying fee competition as both traditional finance and crypto firms, including Kalshi, CME, Kraken, and Robinhood, have announced their entry into the 24-hour perpetual futures market. Additionally, concerns about cannibalization were raised, as Coinbase's first-quarter futures revenue grew to $50 million while its more profitable retail spot revenue declined. Compass Point projected that if major overseas exchanges like Binance secure U.S. regulatory approval amid a pro-Trump environment, Coinbase's long-term market dominance and pricing power will be hit.