Bernstein's Bullish Stance on Coinbase
Investment firm Bernstein has initiated coverage of Coinbase Global (COIN.US) with an "Outperform" rating, citing the platform's strategic advantage amid the Trump administration's push to establish the U.S. as the global cryptocurrency capital. Analyst Gautam Chhugani highlights Coinbase's potential to capitalize on this policy shift, despite market concerns over competition and fee pressures.
Key Analyst Insights:
- Market Leadership: Coinbase dominates ~66% of the U.S. market share, with $400B+ in assets and ~10M active users.
- Growth Projections: EPS (earnings per share) could grow at a 38% CAGR, surpassing 2025/2026 consensus estimates by 30% and 61%, respectively.
- Revenue Diversification: Non-trading income (e.g., custody, staking) is expected to rise at a 31% CAGR through 2026, stabilizing cyclical trading revenue.
👉 Explore how Coinbase leverages regulatory tailwinds
Why Coinbase Stands Out
1. Regulatory Tailwinds
The U.S.'s pro-crypto policies under Trump could attract global capital, expanding Coinbase's Total Addressable Market (TAM). Chhugani notes that skeptics underestimate this macroeconomic shift.
2. Financial Resilience
- Fee Pressure Mitigation: Rising U.S. market dominance offsets competitive pricing risks.
- Earnings Stability: Recurring revenue from institutional services (e.g., Coinbase Prime) reduces reliance on retail trading.
3. Long-Term Valuation
Bernstein's analysis suggests Coinbase is undervalued relative to its crypto-fair-value earnings, driven by:
- Institutional adoption.
- Regulatory clarity.
👉 Discover Coinbase's institutional solutions
FAQs
Q: How does Trump’s crypto policy affect Coinbase?
A: Policies favoring U.S. crypto leadership could increase domestic market share and liquidity, benefiting Coinbase’s trading and custody services.
Q: What risks does Coinbase face?
A: Regulatory changes and competition (e.g., Binance) remain challenges, but diversification into stable revenue streams mitigates volatility.
Q: Why is Bernstein’s EPS estimate higher than consensus?
A: Bernstein models higher crypto adoption rates and assumes Coinbase maintains premium pricing power due to regulatory compliance.
Keywords: Coinbase, cryptocurrency capital, Trump crypto policy, Bernstein rating, crypto exchange, TAM expansion, institutional crypto services
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