Despite expanding into the crypto derivatives market with the acquisition of Deribit for $2.9 billion, Coinbase’s recent financial report triggered a Wall Street analyst to revise his price target downward. Analyst Mike Colonnese from H.C. Wainwright provided details on the transaction, as well as insights into Coinbase’s earnings performance and updated outlook on the stock’s valuation in a note to clients Friday. Coinbase is making a strategic move to become a global leader in crypto derivatives with this acquisition. The deal also expands its international footprint. Deribit’s strong position as the world’s largest crypto options exchange, with a market share of 75% and over $30 billion in open interest, will be integrated into Coinbase’s platform. Despite the Deribit acquisition, Q1 revenue fell short of expectations with a drop in trading volumes. Revenue was impacted by weaker transaction revenue from spot and futures trading. However, subscription and services revenue saw significant growth. Despite this, Colonnese lowered his revenue estimates for 2025 and 2026 to $7.4 billion and $9.5 billion, respectively, citing the impact of decreased transactions. He also adjusted his earnings per share forecasts to $5.92 and $12.11. While he expects a price target revision to $305 from $350, he remains optimistic about Coinbase’s long-term prospects. A favorable regulatory environment for crypto in the U.S., particularly regarding stablecoin legislation and market structure regulation, is expected to significantly boost growth.