Coinbase stock down 13.3% in month as quantum risk fears hit crypto

Coinbase Global (COIN) shares have fallen 13.3% over the past month, underperforming the S&P 500, which rose 0.6% over the same period through Monday's close. The decline follows a volatile stretch where the stock initially jumped 12% on Sept. 18 as Bitcoin climbed back above $80,000, only to fade as broader crypto assets weakened.

The primary driver for the recent sell-off appears to be escalating concerns regarding quantum computing threats to Bitcoin's security architecture. On Oct. 7, Dragonfly partner Haseeb Qureshi noted on X that if the discrete log problem becomes breakable by classical computers, Bitcoin's security would be compromised. A week later, on Oct. 14, Coinbase experienced its worst single-day drop of the month, falling 4.9% after the company advised Bitcoin developers to begin building defenses against quantum computers immediately. Coinbase stated it holds approximately 5% of all Bitcoin for customers and warned that upgrading the network could take years. While the company clarified that current quantum computers cannot break Bitcoin, the timeline for necessary upgrades raised questions about the long-term security of the asset central to its business model.

Despite these headwinds, Coinbase has continued to expand its institutional footprint. On Sept. 28, Citigroup (C) expanded its partnership with Coinbase to allow institutional clients to accept stablecoin payments. The same day, the Commodity Futures Trading Commission (CFTC) approved Coinbase's proprietary clearing house. Additionally, Coinbase opened initial public offering allocations to US retail traders and signed deals for stablecoin payment cards and a mobile wallet. These developments did not prevent a 5.8% drop on Oct. 16, coinciding with the announcement of the card deal.

Investors now look ahead to third-quarter earnings, scheduled for release after the close on Thursday, Oct. 29. Analysts expect revenue near $1.2 billion, a decline of approximately 37% from the prior year period. This would follow three consecutive quarters of net losses, with the second quarter loss reaching $359.5 million. Chief Financial Officer Alesia Haas has indicated that 2026 expenses are expected to mirror 2025 levels, excluding USDC rewards, suggesting that increased trading volumes could flow directly to profit.

Valuation metrics remain elevated relative to historical averages and peer expectations. As of Friday, Coinbase traded at 169 times forward earnings, significantly above its five-year average of 28.2 times and well below its February 2024 peak of 360 times. The consensus analyst price target has decreased from approximately $382 to $212 over the past year, though this remains about 26% above Monday's closing price. Recent analyst actions reflect mixed sentiment; Barclays raised its target to $149 from $95 on Oct. 7 citing better third-quarter volumes, while Citi lifted its target to $230 on Oct. 13.

The stock is currently down 55% from its 52-week high. Earnings estimates project a normalized loss of $1.87 in 2026, compared to positive earnings of $4.45 in 2025 and $9.48 in 2024.