TLDR
Coinbase stock hits $368, nearing 2021’s all-time high, fueled by Bernstein’s $510 target price.
Coinbase’s stablecoin revenue from USDC now makes up 15% of total earnings, bolstering its financial strength.
Coinbase’s institutional role grows, with custody of 8 Bitcoin ETFs and involvement in JPMorgan’s Base network launch.
With MiCA approval, Coinbase expands into Europe’s 450M users, enhancing its global market presence.
Coinbase Global’s stock has surged to a four-year high, reaching as much as $368 in recent trading, fueled by Bernstein’s positive outlook for the company. This rally positions Coinbase’s stock near its all-time closing price of $357, recorded in 2021. Bernstein raised its target price for Coinbase (COIN) from $310 to $510, citing the company’s dominant position in the U.S. crypto industry and its strong growth prospects.
Bernstein’s Bullish Forecast for Coinbase
Bernstein analysts have placed a $510 price target on Coinbase, labeling the crypto exchange stock as “misunderstood.” According to their report, the stock’s recent performance reflects the growing strength of the company’s business model.
They highlight Coinbase’s leadership in the U.S. crypto market and its expanding stablecoin operations, both of which contribute to the company’s revenue stream. The firm’s analysts also maintain an “outperform” rating for Coinbase, noting the crypto exchange’s unique position as the only crypto company listed in the S&P 500.
Coinbase’s dominance in the stablecoin market is particularly noteworthy. The company’s stablecoin-related revenue, primarily driven by USDC, represents a significant portion of its total earnings. This business segment has grown to account for 15% of Coinbase’s total revenue, as the company has integrated its stablecoin services with major platforms, including Shopify. Bernstein analysts are confident that these efforts will further bolster Coinbase’s financial standing.
Coinbase’s Expanding Role in Crypto Markets
Coinbase’s recent success is tied to its strategic moves within the broader cryptocurrency ecosystem. The exchange has continued to grow its influence among institutional investors.
As the custodian for eight Bitcoin ETF issuers, Coinbase plays a key role in the institutional adoption of cryptocurrencies. This involvement places the exchange in a unique position to benefit from the expanding interest in digital assets among traditional financial institutions.
Moreover, Coinbase’s acquisition of Deribit, a crypto options platform, and its operation of the Base network, one of the largest and fastest-growing layer-2 Ethereum networks, are expected to contribute to the company’s growth. The Base network’s success is highlighted by its involvement with major projects, such as JPMorgan’s upcoming launch of the JPMD coin on Base. These developments demonstrate Coinbase’s commitment to staying at the forefront of the evolving digital asset space.
Legislative Developments Boost Coinbase’s Prospects
In addition to its operational successes, Coinbase stands to benefit from legislative developments in the U.S. government. The passage of the stablecoin bill in the Senate has provided much-needed clarity for crypto companies, particularly those involved in the stablecoin market, such as Coinbase.
Bernstein’s analysts anticipate that such regulations will continue to support Coinbase’s business model, allowing the company to expand its services with greater certainty.
The firm also highlights the potential positive effects of the GENIUS Act and the CLARITY Act, which are expected to create a more favorable regulatory environment for the crypto industry. Bernstein believes that these factors, combined with Coinbase’s expanding services, will help the company continue to grow its market share.
Coinbase’s International Expansion
Coinbase has also focused on expanding its international presence. The company recently secured a MiCA (Markets in Crypto-Assets) license, allowing it to offer its services to 450 million users across the 27 EU member states. This development strengthens Coinbase’s position as a global crypto exchange and opens up new growth avenues in Europe. With regulatory approvals in place, Coinbase is now better positioned to attract a broader customer base, both retail and institutional.
The company’s stock has also benefitted from its continued partnerships with major players in the crypto space. The exchange’s collaboration with Circle, the issuer of USDC, has further solidified Coinbase’s position in the stablecoin market. The continued growth of stablecoins is expected to fuel further demand for Coinbase’s services, particularly in terms of merchant adoption and institutional usage.
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