Coinbase Global Inc. shares under the ticker COIN surged on Friday following the release of the fourth quarter report and the company's official response to the Federal Reserve's initiative to create a prototype payment account. However, revenue fell short of expectations, and trading volumes from retail clients decreased.
In the first hours of trading, COIN shares gained over 15%, and by the end of the session, the increase was around 13%, closing at $159.44. This movement reflects a combination of two factors: a positive investor reaction to earnings per share that exceeded forecasts and market interest in Coinbase's position in the dialogue with the Federal Reserve.
Coinbase fell short of the revenue forecast for Q4
Coinbase did not meet revenue expectations for Q4 2025. The company reported $1.78 billion, while the market expected $1.85 billion. However, earnings per share came in slightly better than forecast: $0.66 versus $0.64.
The main failure of the quarter was in trading activity. Transaction revenue fell short of $1 billion, retail trading dropped by 13% compared to the previous quarter, and institutional volumes decreased. It seems the market has simply entered a calmer phase, which immediately impacted the numbers.
But not everything looked weak. Coinbase specifically noted growth in revenue in the institutional direction, aided by Deribit, the derivatives platform the company recently acquired. Coinbase states that this segment is holding steady and supports the overall picture at the start of 2026.
Coinbase sent a letter to the Federal Reserve in support of the payment account
In parallel with the Coinbase report, the company approached the Federal Reserve with a separate position. The company sent a letter to the Board of Governors and commented on the initiative to create a special payment account at the reserve bank.
Overall, the exchange supported the idea. It concerns expanding access to the Federal Reserve's infrastructure, including FedWire and FedNow, for non-bank financial organizations. According to Coinbase, this step could spur the modernization of the American financial system and bring it closer to the models already applied in the UK, Brazil, and India.
But the support was conditional. The company believes that strict restrictions, such as balance limits, prohibitions on certain operations, and the absence of interest on the daily balance, could make the tool ineffective. Coinbase proposes to relax these frameworks; otherwise, the payment account risks remaining a formality rather than an operational tool for the market.
The company's policy director, Faryar Shirzad, noted:
"The payment account is an important step towards modernizing the financial system. However, its structure must remain scalable and functional."
The commercial model and risk control are at the center of Coinbase's proposals
In its address, Coinbase proposed to adjust the parameters of the new payment account. Among the initiatives: the ability to hold client funds in an omnibus format, reconsider or remove the limit on the balance at the end of the day, as well as accrue market interest on allowable balances.
The company noted that using the total volume of assets to calculate the limit on the overnight balance may not be suitable for payment operators and custodial services that operate outside the classical banking model. According to Coinbase, the Federal Reserve should apply more flexible regulatory tools, such as variable interest thresholds, instead of strict limits.
"The account structure should support liquidity and payment activity while maintaining risk management mechanisms," the company stated.
Coinbase also emphasized that organizations gaining access to such an account are already required to comply with strict compliance requirements, including AML, KYC, and cybersecurity standards. According to the exchange, these measures are sufficient to minimize additional risks to the payment system.
COIN is recovering amid interest in derivatives and strategic positioning
Despite the quarterly loss, the first in two years, Coinbase's shares rose. Investors, judging by the reaction, are looking beyond and betting on a stronger 2026. Additionally, the company announced plans to return part of the capital to shareholders, which added confidence to the market.
JPMorgan analyst Kenneth Worthington did not change the 'overweight' rating, but did lower the target price from $290 to $252. He noted that some users are leaving for platforms with lower fees. However, according to him, Coinbase has made significant progress in the derivatives segment, and this vector could offset the pressure.
The company's position in the dialogue with the Federal Reserve also played a role. The clear argumentation in the letter to the regulator was appreciated by investors. Even a temporary pause in trading for some users did not change the overall sentiment. Yes, the quarter turned out to be challenging, but the focus on payment solutions and the institutional segment shows that the company is preparing for the next stage of the market.
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