Wall Street fails to recognise Coinbase’s potential.
In a note to investors on Wednesday, analysts from Bernstein, the asset management firm, made that argument.
They said that Coinbase is the “most misunderstood” company in crypto and that it’s primed for a hefty stock surge.
What’s the misunderstanding?
Most investors still see Coinbase as a retail trading platform — not as an infrastructure giant that powers the crypto economy behind the scenes.
“Despite multiple growth levers — from stablecoins to staking and derivatives — consensus remains far too bearish on what is effectively crypto’s universal bank,” said Bernstein analysts Gautam Chhughani and his two colleagues.
$510 a share
Once investors wise up, Coinbase’s stock is set to pop, said Bernstein.
They forecast a $510 price tag for Coinbase’s shares, a whopping 42% jump from its current price.
Wake-up call
Bernstein’s note points to a company nestling itself at the centre of the crypto industry.
It already safeguards assets for eight of the 11 US spot Bitcoin exchange-traded funds, processes billions in derivatives through its Deribit stake, and is building out Base, the second largest Ethereum layer-2 by total value secured.
The company is now set to benefit from a friendlier US regulatory regime, having already established its bonafides as a compliance-first exchange with an ability to find new revenue streams, the Bernstein analysts wrote.
“With growing dominance in custody, stablecoins, and derivatives, and regulatory tailwinds from the Genius and Clarity Acts, we believe the market is underestimating its earnings power,” they wrote.
In 2024, Coinbase reported it took in $6.6 billion in total revenue, while net income topped $2.6 billion. Moreover, the company holds a whopping $220 billion in assets under management.
Since May, it is also the only crypto company in the S&P 500.
Coinbase has a lot going for it, Bernstein said.
It’s been busy diversifying into products that offer steadier income, and are not beholden to crypto cycles.
Just last month, it inked a $2.9 billion deal with derivatives giant Deribit — a platform that accounts for about 85% of all Bitcoin and Ethereum options trading.
Additionally, volatility in both directions also brings traders in, which can help Coinbase earn fees even in bearish conditions.
Regulatory tailwinds in the US are expected to unlock opportunities for Coinbase to offer more options products to investors, Bernstein said.
Meanwhile, its Base network, the fastest-growing Ethereum Layer-2, is becoming a force to be reckoned with in tokenised finance.
In 2024, the network generated $24 million in profit.
Coinbase’s business not pertaining to trading could hit $4.2 billion in 2025, Bernstein said. Even its first-quarter dip in earnings, driven by paper losses on held cryptocurrency, was brushed off by analysts.
