Bernstein says Coinbase is a misunderstood crypto stock and could rally 50 percent

Coinbase stock jumped more than 4% in early trading Wednesday after investment firm Bernstein raised its price target to $510 from $310, calling the crypto exchange the most misunderstood business in the digital asset space, according to CoinDesk reporting. The Wall Street analysts believe Coinbase is building itself into crypto's universal bank by connecting retail customers, big institutions, and blockchain technology in ways that other companies cannot match.

Bernstein's team pointed out that Coinbase remains the only crypto-focused company in the S&P 500 index and continues to control most cryptocurrency trading in the United States despite facing tough competition from other exchanges. The investment firm highlighted how Coinbase's stablecoin business now brings in about 15% of the company's total revenue and is growing fast through partnerships like the one with online shopping platform Shopify. CoinDesk noted that Coinbase also provides secure storage services for eight out of eleven Bitcoin investment funds, showing its strong position in the institutional market.

Yahoo Finance analysis reveals that two major developments have pushed Coinbase shares higher, with the US Senate passing important stablecoin legislation and the company seeking approval to trade tokenized stocks. The GENIUS Act passed the Senate with strong support from both political parties in a 68-30 vote on Tuesday, June 17, creating the first federal rules for stablecoins, including requirements that they be backed by safe assets like US dollars.

This law could be huge for Coinbase because it allows non-bank companies to create stablecoins, which benefits the exchange's partnership with Circle, the company behind USD Coin. Coinbase's stablecoin revenue reached $298 million in the recent quarter, making up 15% of total revenue and growing 51% compared to the same time last year. Yahoo Finance reported that Treasury Secretary Scott Bessent thinks the stablecoin market could grow to $3.7 trillion in the coming years, showing the massive potential for companies like Coinbase to capture more business in this expanding market.

Investment news site Investors highlighted how Coinbase benefits from multiple growth areas while bitcoin prices continue climbing and crypto regulations become clearer in Congress. Bernstein analyst Gautam Chhugani explained that despite having several ways to grow, many investors still feel negative about what he calls the largest crypto universal bank in the market.

The analyst pointed to Coinbase's unique position as the only crypto company in the S&P 500 after being added on Monday, May 19, replacing Discover Financial Services following its purchase by Capital One Financial. Coinbase dominates cryptocurrency trading in America, runs the biggest stablecoin business among exchanges, leads in serving institutional clients, and recently bought Deribit, the world's largest crypto options trading platform. Investors noted that Coinbase is also preparing to launch perpetual futures trading, which lets people bet on future crypto prices without buying the actual digital coins since these contracts never expire, giving the company another way to make money from trading fees.