Wall Street broker Bernstein maintains its most bullish stance on Coinbase (COIN), holding an outperform designation alongside a $510 price target, despite recent market downturns and renewed volatility in bitcoin fluctuations affecting sentiment in crypto-linked stocks.
In a note released on Monday, analysts led by Gautam Chhugani described the current environment as “fragile,” with erratic price movements in cryptocurrency impacting public market indicators.
However, the firm’s analysis suggested that this decline is different from previous crypto downturns, as the fundamental businesses seem to be resilient, and excess speculation is more narrowly focused. Bernstein highlighted that speculative excess is largely found among “MSTR copycats,” while larger, established players are adapting more sustainably in their market monetization strategies.
For Coinbase, this strategic evolution underpins the optimistic outlook. The analysts indicated that the exchange aims to lessen its reliance on spot trading by developing an “everything exchange,” which resembles a comprehensive financial platform rather than just a singular crypto venue.
The analysts pointed out that stablecoins have already become a substantial revenue source for Coinbase, although investors still tend to view additional services like staking and custody as merely another form of crypto risk.
From Bernstein’s perspective, clearer regulatory frameworks in the U.S. could serve as a significant trigger to reassess those revenue streams, speed up Coinbase’s growth, and diminish the edge held by offshore competitors that previously expedited token listings and reaped fundraising benefits.
Additionally, the broker noted that Coinbase is intensifying its focus on token issuance through a launchpad-style model, which could generate income via success fees while creating a cyclical effect: more issuances leading to increased listings and, in turn, higher trading volumes. Bernstein cited Monad’s listing as an example of market demand for such a model.
A key catalyst ahead
Another element bolstering the optimistic view is a forthcoming product catalyst: Coinbase’s planned product showcase on Dec. 17, which Bernstein anticipates will display offerings that extend beyond spot trading, including tokenized equities and prediction markets.
The firm also highlighted a growing venture into derivatives, aided by Deribit, as a trend that could position Coinbase to resemble broker-dealers like Robinhood (HOOD), with both models merging as they diversify their offerings.
On the consumer front, the report pointed out that Coinbase’s Base app could serve as a versatile access point that integrates wallet functionality, payments, and social features, alongside broader token access via on-chain integrations.
When combined, the broker portrayed Coinbase’s strategy as a shift from being primarily a spot-driven exchange to a wider distribution and services platform, which it believes can grow through regulatory advancements, new token issuances, and an expanding product range, even if short-term sentiment remains vulnerable to crypto volatility.
At the time of publication, Coinbase shares were up 3.7%, trading at $269.42, offering almost 90% upside potential relative to Bernstein’s price target.
Read more: Investors Should Buy the Dip in Coinbase and Circle, Says William Blair
