Coinbase Bulls Face Make-or-Break Test as ARK Flags Q4 Underperformance

Source: Cryptonews Original Title: Coinbase bulls face make-or-break test as ARK flags Q4 underperformance Original Link:

Q4 Performance Overview

Coinbase emerged as the largest detractor across ARK Invest’s innovation-focused exchange-traded funds during the fourth quarter of 2025. Cryptocurrency spot trading volumes on centralized exchanges fell 9% quarter-over-quarter, pressuring crypto-linked holdings. An October 10 liquidation event eliminated $21 billion in leveraged positions across the cryptocurrency sector, further impacting performance.

Market Headwinds and Winners

Roblox Corp. also underperformed after reporting third-quarter bookings growth of 51% year-over-year while projecting declining operating margins in 2026 due to higher infrastructure and safety costs. Russia’s ban on Roblox over child safety concerns removed approximately 8% of the platform’s daily active users, though the region accounted for less than 1% of total revenue.

Conversely, several holdings delivered strong returns:

• AMD emerged as the quarter’s strongest contributor following AI partnerships with OpenAI and Oracle Corp. for a public AI supercluster. Third-quarter earnings reflected 36% year-over-year revenue growth driven by demand in Data Center and Gaming segments.

• Shopify rallied following its integration with OpenAI, enabling instant in-chat checkout for ChatGPT users. Third-quarter earnings showed 32% year-over-year growth in both gross merchandise value and revenue.

• Rocket Lab USA shares surged following an $816 million contract to provide 18 missile warning, tracking, and defense satellites in low Earth orbit—the largest contract in company history.

Strategic Pivot: “Everything Exchange”

Coinbase is executing an “everything exchange” strategy in 2026, combining cryptocurrency, equities, prediction markets, and commodities across spot, futures, and options products. The exchange hosted a product event during Q4 showcasing on-chain equities, prediction markets, and an AI-powered portfolio advisor.

Key initiatives include:

• Prediction Markets: Partnership with Kalshi, a federally regulated platform approved by the U.S. Commodity Futures Trading Commission, supporting USDC or USD trading across economics, politics, sports, and technology categories through Coinbase Financial Markets.

• Tokenized Equities: Plans to issue tokenized equities in-house rather than through external partners, marking a departure from competitors relying on third-party providers.

• Regulatory Support: Goldman Sachs upgraded Coinbase from neutral to buy on January 6, raising its 12-month price target and citing growing confidence in the company’s diversification strategy. Analyst James Yaro highlighted initiatives in infrastructure, tokenization, and prediction markets as potential growth drivers.

2026 Outlook

Coinbase leadership expects broader cryptocurrency adoption in 2026, driven by increased participation from retail and institutional investors as regulatory clarity improves. CEO Brian Armstrong stated the goal is to make Coinbase the No. 1 financial app in the world, with investments in product quality and automation supporting the expansion.

However, the exchange has threatened to withdraw support for the ongoing draft Crypto Market Structure Bill following last-minute changes the industry claims would effectively end decentralized finance.

Four of ARK’s actively managed ETFs underperformed broad-based global equity indexes during Q4, while two outperformed or delivered mixed results. Wood stated the innovation space is recovering and being revalued, with headwinds previously pressuring disruptive technologies shifting into structural tailwinds.