Investors may be overlooking a key component of Coinbase’s business that’s offsetting recent weakness in the company’s core trading business, according to Rosenblatt. Trading volumes have fallen amid cautious market conditions – March’s daily average is now 20% below February’s after being up 10% just two weeks ago. However, stablecoin growth has accelerated, driven mainly by USDC , the second-largest stablecoin on the market with which Coinbase enjoys a 50% revenue sharing agreement . “We’re not worried as the potential top line pressure is offset by encouraging market share gains and accelerating outstanding growth at USDC, up 36% YTD,” Chris Brendler, the analyst at Rosenblatt, said in a note Wednesday. “With stablecoin legislation increasingly likely in 3Q25, we believe investors underestimate the potential of COIN’s non-trading revenue streams in this political environment and expect the stock to revalue higher as investors grow more comfortable with COIN’s business mix.” “As a result, we view any volume-related weakness in the shares as a buying opportunity and reiterate our BUY rating,” he said. Brendler has a $305 price target on the shares, implying almost 50% upside from its closing price Tuesday. Stablecoins are cryptocurrencies that promise a fixed value peg to another asset, usually the U.S. dollar. The market cap for dollar-backed stablecoins has been climbing to all-time-highs this year and has grown more than 46% over the past 12 months, according to CryptoQuant. CEO Brian Armstrong said on the company’s most recent earnings call that it has a “stretch goal to make USDC the number 1 stablecoin.” USDC currently makes up about 26% of the total market cap for stablecoins, behind Tether ‘s 67%. Its market cap has grown 36% this year, however, compared with 5% growth in Tether’s market cap. Coinbase is still up 1% since Trump was re-elected in November, but its down 9% in March and 21% year to date. “With multiple positive tailwinds from the sea change in attitudes toward crypto in DC, we believe continued weakness as unlikely, so our estimates remain unchanged for now,” Brendler said. —CNBC’s Michael Bloom contributed reporting. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
