Traders of Coinbase (COIN) are likely in for a better-than-expected earnings report for the second quarter, analysts predict, but regulatory risks, as well as the threat of lower trading volumes, continue to persist.

FactSet consensus estimates call for Coinbase’s revenue to decrease from the previous quarter, to $629 million from $773 million. Trading volume for the period ending June 30 is expected to have slowed down to $114 billion from Q1 when it was $145 billion. And earnings per share are expected to be a loss of $0.76, compared to a loss of $0.34 in the first quarter.

“We expect adjusted EBITDA to come in well ahead of consensus,” analysts at British banking giant Barclays wrote in a report on Tuesday. In an earlier note from July 13, they said they had been impressed by the resilience of retail trading activity on the exchange. However, they noted that the upside remaining over the longer term could compress.

Shares of Coinbase are currently up 177% year-to-date, which is thanks to two factors, Barclays said. One is the U.S. District Court of the Southern District of New York judge’s ruling that the sale of Ripple’s XRP tokens on exchanges and through algorithms did not constitute investment contracts, which bolsters Coinbase’s argument that many of the tokens it sells are not securities.

And the second is multiple applications from financial institutions for spot bitcoin exchange-traded funds (ETF), which could greatly expand the availability of and demand for bitcoin.

However, the rally could be short-lived. Berenberg analyst Mark Palmer warned in a note on Tuesday that another judge from the same district rejected the ruling , arguing that there should be no distinction between institutional sales and sales to retail investors on crypto exchanges. In a separate note on Monday, Palmer also wrote that the “underpinnings of COIN’s recent rally were shaky and that the reality of the company’s still-precarious situation may come back into focus with the release of its Q2 report.”

He also warned about risks coming from the USDC stablecoin, which generated $199 million, or 27% of Coinbase’s net revenue from interest income in Q1.

“The market cap of USDC has continued its steady decline,” Palmer said. “Now, USDC, and Coinbase’s revenue derived from it, could be facing another threat.” This is because of concerns raised by the U.S. Federal Reserve and other regulators regarding stablecoins.

Another area of concern is Coinbase’s trading volume, which remained low in July, Barclays noted, citing data from The Block which showed that exchange volume in July was down 5% month-over-month.

“We had expected COIN to report weak Q2 23 trading volumes even before the SEC filed a lawsuit against it on June 6, and we believe the overhang from the suit could result in persistent weakness in the company’s trading volumes as well as a reduction in the amount of assets on its platform,” Berenberg’s Palmer wrote.