TLDR
- Rosenblatt initiated coverage on COIN with a buy rating and $305 price target (45% upside)
- Coinbase shares declined roughly 30% since mid-February and 40% from December highs
- Analyst Chris Brendler calls Coinbase the “clear blue chip” in the crypto sector
- Coinbase was not included in the S&P 500 quarterly rebalancing announced March 10
- The stock’s decline coincides with broader market weakness and selling in crypto-related assets
Coinbase has experienced a turbulent period in the stock market. The cryptocurrency exchange saw its shares drop about 30% over a three-week period since mid-February. This decline extends to roughly 40% from the 52-week high reached in early December.
Despite this downturn, investment firm Rosenblatt sees a buying opportunity. Analyst Chris Brendler initiated coverage of Coinbase with a buy rating on March 7.
Rosenblatt set a price target of $305 for COIN. This represents a potential 45% upside from current trading levels.
The analyst described Coinbase as the “clear blue chip in the sector.” Brendler believes the company is positioned to benefit from multiple positive trends in the cryptocurrency industry.
“COIN has also proven its ability to navigate both Bull and Bear markets,” Brendler noted in his report. He highlighted the growth in non-trading revenue as a factor that could make the stock more resilient during future market downturns.
Brendler characterized the current market as more of a “Crypto Spring” than a “Crypto Winter.” This perspective supports his positive outlook on Coinbase despite recent price weakness.
The analyst attributed COIN’s recent declines to tariffs implemented by President Donald Trump. He also cited broader political uncertainty as a factor pushing risk markets lower across the board.
A dominant player in the cryptocurrency industry
Rosenblatt emphasized Coinbase’s position as a dominant player in the cryptocurrency industry. The firm pointed to Coinbase’s strong brand recognition, deep liquidity, and superior user experience as competitive advantages.
“Regulatory clarity will attract more TradFi players into crypto,” Brendler stated. He added that Coinbase’s “decade-plus head start and comprehensive product suite position it to maintain market leadership.”
On Friday, March 7, COIN shares closed 1% lower at $211. This occurred amid a difficult day for markets overall, with the Nasdaq down 1.4%, the S&P 500 down 1.1%, and Bitcoin falling 3.5% to $87,000.
The downward pressure on Coinbase intensified the following week. On Monday, March 10, COIN shares tumbled after the company was not included in the S&P 500 quarterly rebalancing.
Instead, DoorDash (DASH), Williams-Sonoma (WSM), and TKO Group (TKO) were selected to join the S&P 500. These changes are scheduled to take effect at the start of trading on Monday, March 24.
Coinbase’s exclusion from the index appeared to accelerate selling in the stock. The decline occurred alongside drops in other crypto-related assets.
Bitcoin prices fell on the same day. Other crypto-exposed stocks like MicroStrategy (MSTR) and Robinhood (HOOD) also traded lower on March 10.
Market observers noted a general “risk-off” sentiment pervading markets. This cautious approach by investors affected various growth-oriented and crypto-related assets.
A pro-crypto regulatory environment should benefit Coinbase
The Trump administration’s stance on cryptocurrency remains a factor for Coinbase investors to monitor. Despite recent market volatility, some analysts believe a pro-crypto regulatory environment could eventually benefit companies like Coinbase.
Coinbase’s ability to generate revenue beyond trading fees may prove important during market fluctuations. The company has worked to diversify its income streams beyond simple transaction-based revenue.
For now, investors must weigh Rosenblatt’s optimistic outlook against the market’s current pessimism. The stock’s exclusion from the S&P 500 represents a setback for institutional adoption in the near term.
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