Coinbase CEO’s Legislative Reversal Sends Shares Tumbling

In a surprising strategic shift, Brian Armstrong, the Chief Executive Officer of America's largest cryptocurrency exchange, Coinbase, has withdrawn support for a pivotal digital assets bill. This abrupt reversal not only derailed a key Senate committee vote but also triggered a sharp decline in the company's share price, highlighting the volatile intersection of crypto regulation and market sentiment.

The immediate consequence of Armstrong's announcement, made on the social media platform X, was a sell-off that pushed Coinbase shares down approximately 6.5% to $239.28. The CEO stated that the exchange could no longer endorse the current draft of the "Digital Asset Market Clarity Act." His core objections centered on provisions he argued would eliminate rewards programs for stablecoins, effectively institute a ban on tokenized securities, and grant excessive authority to the Securities and Exchange Commission (SEC) at the expense of the Commodity Futures Trading Commission (CFTC).

The issue of stablecoin rewards is particularly significant from a business perspective, as these programs contribute a notable revenue stream for Coinbase. The company's veto forced the Senate Banking Committee to postpone its scheduled vote on the legislation. Market observers view this delay as a substantial setback for efforts to establish a comprehensive regulatory framework for the $3.3 trillion U.S. digital asset market. The ensuing uncertainty was swiftly reflected in options trading, where increased activity in put options signaled investor anticipation of further price declines.

Should investors sell immediately? Or is it worth buying Coinbase?

A Divided Crypto Industry Emerges

Coinbase's policy reversal has exposed significant fissures within the cryptocurrency sector. Armstrong maintains that the proposed legislation in its present form is worse than having no new law at all. This stance is not universally shared. Michael Novogratz, CEO of Galaxy Digital, has publicly advocated for advancing the bill despite its flaws, arguing that amendments could be made later.

Furthermore, Coinbase's warning of a "de-facto ban" on tokenized securities has been contested. Representatives from specialized firms like Securitize counter that the draft simply clarifies that existing securities laws apply to such assets—a step they welcome as necessary for integrating digital assets into the traditional financial system.

Upcoming Financials Take Center Stage

With the legislative process now in a holding pattern, investor focus is likely to return to fundamental performance metrics. Coinbase is scheduled to release its fourth-quarter and full-year 2025 financial results on Thursday, February 12, 2026. This earnings report will provide management with its first major platform to offer an official outlook following the recent regulatory developments. Despite recent share price volatility and lowered price targets from analysts at firms like Piper Sandler, the overall consensus rating among market experts currently remains at "Moderate Buy."