Coinbase Tumbles as Analyst Recommends Pivot to iShares Bitcoin Trust ETF

Coinbase has been on a wild ride since its IPO, but one analyst thinks it's time to pivot and consider an alternative investment. According to a recent article, Coinbase's shares have dropped by 48.6% from $328.51 to $168.87 over the past nine months, while iShares Bitcoin Trust ETF (NASDAQ:IBIT) fell only 40.2% during the same period.

The analyst points out that Coinbase's bloated cost base and structural issues have led to a GAAP loss of $1.49 per diluted share in Q1 2026, missing expectations by a wide margin. The company also reported revenue of $1.41 billion, down 30.54% year over year, and losses on crypto assets held for investment totaling $482.40 million.

The analyst notes that management's response to these issues has been a 14% headcount reduction targeting roughly $500 million in annualized savings, but this may not be enough to address the company's underlying problems. The data breach incident costs have also weighed heavily on Coinbase's bottom line, with $307 million in Q2 2025 alone and an additional $8.6 million in Q1 2026.

The iShares Bitcoin Trust ETF (NASDAQ:IBIT), on the other hand, offers a cleaner drawdown and lower execution risk compared to Coinbase. With 99.93% of its net assets invested in underlying Bitcoin trust, IBIT has tracked the asset's performance closely while avoiding the pitfalls associated with being a middleman.