Rosenblatt recommends buying Coinbase as stablecoin growth offsets trading slump

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.

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