Shares of Coinbase Global Inc. (NASDAQ: COIN) surged on Friday after the company posted a better-than-expected earnings per share result for the fourth quarter and submitted a formal response to the Federal Reserve’s proposed payment account prototype. The rally comes despite a reported revenue miss and declining consumer trading volume. COIN stock rose by over 15% in early trading and settled at a 13% gain to $159.44 during the session. This movement reflects a mix of investor confidence in Coinbase’s policy positioning and market reaction to its earnings performance. Coinbase Misses Q4 Revenue Target Coinbase reported total revenue of $1.78 billion in Q4 2025, down 5% compared to the previous quarter. The result fell short of analysts' expectations of $1.85 billion, according to Benzinga Pro. Despite this, the company posted $0.66 in adjusted earnings per share, slightly ahead of the consensus estimate of $0.64 per share. Transaction revenue came in below $1 billion as retail trading dropped 13% quarter-over-quarter. Institutional spot volumes also declined during the period. These figures reflect continued pressure on trading activity during a quieter phase in the crypto markets. However, Coinbase reported an increase in institutional transaction revenue, supported by the performance of its recently acquired derivatives platform, Deribit. The company said this segment showed resilience and helped support overall activity heading into 2026. Coinbase Sends Fed Letter Supporting Payment Account Proposal Alongside its earnings release, Coinbase submitted a formal letter to the Board of Governors of the Federal Reserve System. The letter responded to Docket No. OP-1877 and backed the proposed special purpose Reserve Bank payment account prototype. In the letter, Coinbase praised the Fed’s effort to expand access to its core payment infrastructure, such as FedWire and FedNow, for eligible non-bank financial institutions. The firm argued that the Payment Account could modernize U.S. financial infrastructure and match international progress seen in jurisdictions like the UK, Brazil, and India. However, Coinbase also raised concerns. The company warned that proposed restrictions, including balance caps, limits on permitted uses, and no interest on end-of-day balances, could limit the practical utility of the account. Coinbase called for fewer constraints to support innovation in payment services. Chief Policy Officer Faryar Shirzad wrote, “The payment account represents an important step toward financial modernization. However, its structure must remain functional at scale.” Commercial Viability, Risk Controls are Core of Coinbase Comments Coinbase proposed several adjustments to the account structure. These included allowing customer funds to be held in omnibus format, eliminating or adjusting the overnight balance cap, and paying market interest on eligible balances. The company explained that using total assets to set overnight balance caps may not suit payment processors or custodial firms that do not operate on traditional banking models. Coinbase argued that the Fed should adopt flexible tools to manage account use, such as variable interest thresholds, rather than hard limits. “The account’s design should support liquidity and payments activity while maintaining risk safeguards,” Coinbase stated in its filing. Coinbase also affirmed that any firm granted access would already be subject to strict compliance requirements, including AML, KYC, and cybersecurity standards. It argued that these protections would help manage any additional risk to the payment system. COIN Rebounds as Investors Focus on Derivatives and Policy Vision Despite posting its first quarterly loss in two years, Coinbase’s share price surged due to investor optimism about its positioning for 2026. The firm is also working to return capital to shareholders, which supported sentiment in Friday’s session. JPMorgan analyst Kenneth Worthington kept an “overweight” rating on COIN stock but reduced the price target to $252 from $290. He noted a shift toward low-fee trading alternatives among users, yet highlighted Coinbase’s progress in building out derivative tools. The company’s strong policy engagement despite pausing trading yesterday for some users and strategic clarity in its letter to the Fed further strengthened investor confidence. While Q4 revenues were under pressure, Coinbase’s focus on long-term payments innovation and institutional services is helping it navigate a more mature digital asset market.
