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Bernstein starts Coinbase at Outperform, sees strong regulatory tailwinds

  • 17.03.2025 20:59
  • markets.businessinsider.com
  • Keywords: Coinbase

Bernstein analyst Gautam Chhugani rates Coinbase Outperform with a $310 price target, citing strong U.S. regulatory support for crypto and growth opportunities in non-trading services.

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Analyst rating: Buy

Bernstein analyst Gautam Chhugani initiated coverage with an Outperform rating and a price target of $310. The analysis highlights strong regulatory tailwinds, positioning the U.S. as the 'crypto capital of the world', which is expected to drive industry growth. Coinbase's total addressable market is expanding due to U.S. reshoring efforts, offsetting competition pressures. The firm also notes momentum in non-trading subscription and services business.

Context

Business Insights and Market Implications Analysis

Business Insights

  • Bernstein's Rating: Bernstein analyst Gautam Chhugani initiated coverage of Coinbase (COIN) with an Outperform rating.
  • Price Target: The firm set a price target of $310 for Coinbase.
  • Regulatory Framework: The U.S. administration aims to establish a digital assets framework, positioning the country as the "crypto capital of the world".
  • Market Expansion: Total addressable market (TAM) expansion from U.S. reshoring efforts is expected to offset competition pressures.
  • Non-Trading Momentum: Coinbase is seeing strong momentum in its non-trading subscription and services business.

Market Implications

  • U.S. Crypto Leadership: The regulatory tailwinds are expected to drive the crypto industry into the mainstream American financial sector, enhancing the U.S.'s global crypto influence.
  • Coinbase's Strategic Position: As a leading U.S.-based exchange, Coinbase is well-positioned to benefit from the government's framework and reshoring efforts.
  • Revenue Growth Potential: The non-trading subscription and services business indicates potential for recurring revenue streams beyond traditional trading.
  • Reshoring Impact: Reshoring crypto activities to the U.S. could lead to increased market share and reduced competition pressures.
  • Competitive Landscape: While competition remains a factor, TAM expansion is expected to mitigate its impact on Coinbase's growth.
  • Stock Performance: As of the latest data, COIN was trading at $237.34, down 0.20% from the previous close.

Long-Term Effects and Regulatory Considerations

  • The establishment of a digital assets framework could create a more favorable regulatory environment for Coinbase and other U.S.-based crypto firms.
  • This regulatory clarity may attract institutional investors and drive further adoption of cryptocurrencies in the mainstream financial sector.

This analysis highlights the potential growth opportunities for Coinbase, driven by strategic positioning, market expansion, and supportive regulatory developments.