Rosenblatt recommends buying Coinbase as stablecoin growth offsets trading slump

Source Cryptopolitan

Rosenblatt analysts believe that Coinbase is successfully mitigating the impact of weaker trading volumes by capitalizing on the rapid expansion of stablecoins—particularly USDC. 

Stablecoins, digital assets designed to maintain a fixed value—often pegged to the US dollar—have seen remarkable growth over the past year.

According to CryptoQuant, the total market capitalization of dollar-backed stablecoins has surged by over 46%, reaching record highs in 2024.

Rosenblatt advises purchasing the Coinbase dip, pointing to the USDC stablecoin’s growth

Trading volumes have declined in cautious market conditions, with March’s daily average now 20% below February’s, despite a 10% increase just two weeks ago. Meanwhile, stablecoin growth has surged, led by USDC—the market’s second-largest stablecoin—which benefits from a 50% revenue-sharing agreement with Coinbase.

Chris Brendler, an analyst at Rosenblatt, expressed confidence in Coinbase’s outlook, stating that potential pressure on the company’s top line is being offset by strong market share gains and the rapid growth of USDC, which has risen 36% year-to-date.

He highlighted that with stablecoin legislation increasingly likely by the third quarter of 2025, investors may be underestimating the potential of Coinbase’s non-trading revenue streams. As the political environment shifts, he expects the stock to be revalued higher as investors gain more confidence in Coinbase’s business mix.

Because of this, Brendler stated that  Rosenblatt recommends buying the shares and viewing any volume-related weakness as a buying opportunity.

Brendler has set a price target of $305 for the shares, representing a nearly 50% increase from the recent closing price.

Global USDC adoption has increased, making the market more stable

Tether has a market capitalisation of approximately $143.78 billion, representing roughly 61.71%, while USDC’s market capitalization is approximately 25% in the stablecoin market.

Tether’s market capitalization has increased by 5% this year, while USDC’s has increased by 36%.

During the company’s most recent earnings call, Coinbase CEO Brian Armstrong stated that the company’s long-term objective is to make USDC the top stablecoin.

CoinMarketCap reports that USDC is trading at $0.9999, reflecting a 0.01 decrease in the past 24 hours.

Despite a 9% decline in March and a 21% year-to-date decline, Coinbase has increased by 1% since Trump was re-elected in November.

Brendler said, “We believe continued weakness is unlikely due to multiple positive tailwinds from the sea change in attitudes toward crypto in DC, so our estimates remain unchanged for now.”

Rosenblatt starts to report on Coinbase because of the new administration’s potential as a positive catalyst

Citing the potential for a positive catalyst from the new administration’s pro-crypto stance and anticipated regulation driving institutional adoption, Rosenblatt started initiating reports on Coinbase and recommending investments with a price target of $305 and a “Buy” rating.

According to analysts, the long-awaited regulation will spur complete institutional adoption, making the new administration a huge positive catalyst for cryptocurrency.

The company believes that regulatory clarity will greatly benefit Coinbase, especially as the SEC increasingly tolerates digital assets.

Additionally, Coinbase has been lowering its reliance on trading fees by diversifying its sources of income. In the fourth quarter of 2024, non-trading revenue increased 71% yearly, and Rosenblatt anticipates this trend will continue.

Although traditional financial institutions may become more competitive, analysts think Coinbase’s extensive product suite and more than ten years of experience will help it hold onto its top spot.

Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Natural Gas sinks to pivotal level as China’s demand slumpsNatural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
Author  FXStreet
Jul 01, 2024
Natural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
placeholder
Analysts Highlight 4 Reasons Why ETH Price Could Rebound Strongly in MayEthereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
Author  Beincrypto
May 07, Wed
Ethereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
placeholder
Avalanche Price Forecast: AVAX set to extend losses as Open Interest drops to one-month lowAvalanche (AVAX) trades in the green by almost 1% at press time on Wednesday, as it tests a crucial support floor that has held for over two months.
Author  FXStreet
Jun 18, Wed
Avalanche (AVAX) trades in the green by almost 1% at press time on Wednesday, as it tests a crucial support floor that has held for over two months.
placeholder
Gold price bulls seem reluctant amid hawkish Fed-inspired USD strengthGold price (XAU/USD) attracts some dip-buying during the Asian session on Thursday and recovers a part of the previous day's losses to the $3,363-3,362 area, or the weekly trough.
Author  FXStreet
22 hours ago
Gold price (XAU/USD) attracts some dip-buying during the Asian session on Thursday and recovers a part of the previous day's losses to the $3,363-3,362 area, or the weekly trough.
placeholder
Bitcoin Price Forecast: BTC on the verge of a breakdown amid possible US strike on IranBitcoin (BTC) price edges slightly higher, trading near $104,700 at the time of writing on Thursday, after stabilizing above a key level, the 50-day Exponential Moving Average (EMA) at $103,100.
Author  FXStreet
17 hours ago
Bitcoin (BTC) price edges slightly higher, trading near $104,700 at the time of writing on Thursday, after stabilizing above a key level, the 50-day Exponential Moving Average (EMA) at $103,100.
goTop
quote