Full disclosure: I own Coinbase stock. And I need to tell you why that keeps me up at night sometimes.Coinbase just reported $2.3 billion in Q1 revenue, which sounds great until you dig into where it's actually coming from. Transaction fees, USDC stablecoin interest, and custody services made up roughly 90% of that. The problem? All three depend on the exact same thing: a friendly regulatory environment.And we've already seen what happens when that flips.In Q4 2021, Coinbase pulled in $2.5 billion in revenue. By Q2 2022, as SEC enforcement escalated, that number dropped to $1.2 billion. That's a 50% revenue collapse in just two quarters. The company's revenue literally cut in half because the regulatory winds shifted.Now, you might think Coinbase learned from that and diversified their business. They didn't. The same concentration risk that nearly killed them in 2022 is still there in 2026.Let me be clear about what this means: Coinbase is a $60+ billion company whose revenue can still drop by half if regulators decide to crack down again. That's not a small risk, that's an existential one.Transaction fees depend on trading volume, which evaporates when regulation tightens. USDC interest depends on the stablecoin market staying open and accessible. Custody revenue grew nicely after spot ETF approvals, but those approvals can be reversed or restricted if policy changes.Everything is downstream of the same regulatory question: will the government let crypto operate freely or not?Compare this to other financial services companies. Visa's revenue doesn't drop 50% if one regulator gets aggressive because they have multiple revenue streams across different geographies and products. JPMorgan doesn't collapse if one line of business faces scrutiny because they have dozens of others.Coinbase has crypto. That's it. And in the US, crypto's legal status is still basically one bad election away from a major shift.Now, the bull case is obvious: if policy stays favorable, Coinbase is positioned to print money. Spot ETFs are driving custody revenue. Retail trading is back. Institutional adoption is growing. The company is profitable and has a real moat in crypto infrastructure.But that bull case comes down to "policy stays favorable." That's a lot of concentration for a $60+ billion company.I looked at sentiment data while reviewing the latest 10-Q filing, and honestly, most of the optimism is based on the current regulatory environment holding. There's not a lot of discussion about what happens if it doesn't.Here's what I tell myself as a Coinbase shareholder: I'm betting that crypto is here to stay and that the regulatory environment will stabilize in a way that allows the industry to grow. That's a bet I'm comfortable making with a small part of my portfolio.But I'm not comfortable pretending the concentration risk doesn't exist. We have recent, documented proof that this company's revenue can drop 50% in two quarters. Anyone buying Coinbase needs to know that and size their position accordingly. If you believe in that future, Coinbase might be a great investment. If you're not sure, the downside risk is bigger than most $60 billion companies have any right to carry.I'm holding my shares, but I'm watching regulatory news like a hawk. Because in this business, the rules can change fast - and when they do, so does the revenue.