Shares of Coinbase closed at $275.09 on December 10 amid a persistently negative sentiment among retail investors on Reddit, which has resulted in a sentiment score of only 17.2 out of 100 for the stock, categorizing it as “very bearish.” The significant decline in Bitcoin’s value—17.8% from its November peak of $107,482 to approximately $90,000—has adversely affected Coinbase, leading to a 36% drop from its late October high of $343.78.
Retail trading communities are feeling the economic strain, particularly among options traders. One trader on the r/options subreddit lamented their long-term LEAP options (set to expire in January 2027), which were acquired during a market dip in March-April. Despite previously nearing a $250,000 portfolio value, the trader reported a loss exceeding 50% from their all-time high (ATH), stating, “My portfolio is bleeding,” and underscoring that the high correlation of Coinbase with Bitcoin is detrimental to their positions.
Coinbase’s earnings performance also paints a complicated picture. Although the company exceeded Q3 earnings estimates by 27%, reporting earnings of $1.50 per share, compared to the anticipated $1.18, and achieving a robust profit margin of 43.7%, the stock has struggled to maintain these gains. Three primary factors contribute to the bearish outlook:
1. The overwhelming correlation with Bitcoin, highlighted by Coinbase’s beta value of 3.7, amplifying market volatility.
2. The unpredictable nature of earnings, which have fluctuated dramatically between significant beats of 240% and misses of 87% in recent quarters.
3. Options holders are facing exacerbated losses as extreme market volatility erodes the time value of their investments.
In stark contrast, Robinhood has performed strongly, with shares jumping 90% over the past six months and experiencing a staggering 270% rise in 2025. This success is attributed to Robinhood’s diversification into event contracts, options trading, and other financial services, which have lessened reliance on cryptocurrency fluctuations. While both companies reported robust Q3 results, Robinhood’s diverse revenue streams have shielded it from the downturn in Bitcoin.
Wall Street analysts maintain an optimistic outlook for Coinbase, with an average price target set at $382, including 18 buy ratings compared to just two sell ratings—indicating that some professional investors still see potential value in the stock. However, with Bitcoin trading below $91,000 following a recent selloff prompted by Federal Reserve actions and ongoing negativity among retail investors, the outlook for Coinbase remains uncertain. Retail traders, in particular, appear skeptical about the company’s ability to detach itself from the volatility of the cryptocurrency market.
