TLDR
- Coinbase faces increasing competition in perpetual futures trading as analysts question its ability to grow revenue.
- Analysts at Compass Point say low switching costs limit Coinbase’s pricing power among advanced traders.
- The company secured regulatory relief from the Commodity Futures Trading Commission to offer offshore perps via Deribit.
- Competitors, including Kraken and Robinhood, are preparing to launch similar products.
- Coinbase reported $50 million in perps revenue while retail trading revenue dropped to its lowest level since 2024.
Coinbase has entered a more competitive phase in its derivatives expansion as analysts question the revenue impact of its push into perpetual futures trading.
According to analysts at Compass Point, the exchange’s attempt to grow through leveraged crypto products faces structural limits, especially as rivals continue to add similar offerings. In a note released Monday, the firm stated that low switching costs and rising alternatives reduce Coinbase’s ability to charge premium fees on perpetual futures, particularly among advanced traders.
By midday trading, shares of Coinbase had dropped about 2.6 percent to near $184. Compass Point maintained its Sell rating and kept its $140 price target unchanged.
Expansion Into Perpetual Futures Gains Momentum
Earlier developments show Coinbase has accelerated its derivatives strategy. The company confirmed on Friday that it received regulatory relief from the Commodity Futures Trading Commission, allowing U.S. users to access offshore perpetual futures through its subsidiary, Deribit. Coinbase completed the $2.9 billion acquisition of Deribit last year as part of its derivatives push.
On the same day, the regulator approved Bitcoin-linked perpetual futures for Kalshi. Separately, CME Group announced plans to extend Bitcoin futures and options trading to a continuous schedule. These products differ from standard futures contracts because they do not expire and remain tied to the underlying asset through periodic funding payments.
Rivals Accelerate Product Rollouts
Competition has intensified as more platforms enter the space. Analysts at Compass Point noted that Interactive Brokers has already integrated prediction markets alongside crypto exchange Bullish. At the same time, Kraken and Robinhood have disclosed plans to launch their own perpetual futures products.
Within Coinbase’s own results, Compass Point highlighted early signs of internal pressure. The firm reported that the exchange generated about $50 million in first-quarter revenue from perpetual futures, while retail trading revenue declined to its lowest level since the third quarter of 2024.
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