The cryptocurrency market just got a seismic jolt - one that could redefine America's stance on digital assets. Former President Donald Trump, once a vocal skeptic of Bitcoin, has now reversed course, aiming to make the U.S. “the crypto capital of the world.” Trump unveiled plans for a U.S. Strategic Crypto Reserve via Truth Social, marking a paradigm shift in federal policy, and positioning Bitcoin (BTCUSD), Ethereum (ETHUSD), XRP (XRPUSD), Solana (SOLUSD), and Cardano (ADAUSD) as strategic holdings within the nation's financial arsenal.
Far from a passive stockpile, this reserve signals active engagement - potential government purchases, asset management, and perhaps a regulatory reformation that could cement crypto’s legitimacy on a global scale. The mere announcement sent Bitcoin surging past $94,000 while altcoins, like Cardano, soared even higher, pushing the total crypto market cap up by a staggering $300 billion.
Coinbase Global, Inc. (COIN), the leading U.S. crypto exchange, initially surged as well, with investors pricing in expectations for COIN to benefit from increased trading volumes. Yet, with COIN still far from its December peak, will this bold government pivot fuel a sustained rally, or is caution warranted for investors?
Let's take a closer look.
About Coinbase Stock
Delaware-based Coinbase Global, Inc. (COIN) is a juggernaut in the cryptocurrency realm, founded in 2012. With a market cap of $54 billion, it dominates as the world’s second-largest crypto exchange. As a titan of digital asset trading, it thrives on commissions, riding the volatility of bullish surges and bearish retreats. Coinbase courts both retail traders and institutional giants, cementing its dominance.
Beyond transactions, it is diversifying with subscription models like Coinbase One, fortifying its financial resilience. In an industry where regulation is both an obstacle and an opportunity, Coinbase deftly balances compliance and innovation, leveraging partnerships to anchor its foothold in the ever-shifting crypto landscape.
Shares of Coinbase hit a 52-week high of $349.75 in early December, fueled by Bitcoin’s surge, rising USD Coin (BTCUSDC) adoption, and then-President-elect Trump’s pro-crypto stance. Though the stock is now 36.4% below that peak, COIN has still gained 39.3% in six months, edging up just 2.6% over the past year.
COIN’s recent rally came as Trump’s crypto reserve plan lifted sentiment, while the SEC dropping its lawsuit also provided a temporary boost.
In terms of valuation, Coinbase stock trades at a premium, priced at 28.10 times forward earnings and 7.96 times sales. Investors are betting on its dominance as regulation clears and adoption grows.
Coinbase Beats Q4 Top and Bottom Lines
Coinbase released its Q4 earnings results on Feb. 13, raking in $2.3 billion in revenue, up 138.2% year over year, blowing past Wall Street’s targets. The Bitcoin rally past $100K after Trump’s election win fueled a crypto surge, sending net income per share soaring 350% annually to $4.68. Regulatory tailwinds also kicked in, boosting global revenue potential. Meanwhile, Base, its Layer 2 platform, saw assets skyrocket 89% to $14 billion, signaling deeper on-chain engagement.
Total trading volume hit $439 billion, more than doubling annually, with consumer trading volume jumping 176% sequentially to $94 billion - an all-time high. Coinbase crushed the U.S. spot market’s 126% volume rise, locking in $1.3 billion in revenue from consumer transactions, up 179% quarter-over-quarter. Institutional trading volume was not left behind, doubling to $345 billion, with revenue soaring 156% to $141.3 million as more top-tier clients embraced its prime product suite.
It listed 13 new assets, including meme coins PEPE and WIF, while upgrading trading experiences and platform stability. These efforts, coupled with market momentum, pushed MTUs up 24% to 9.7 million, with nearly half being new or revived users.
Coinbase flexed its financial muscle with net income hitting $1.3 billion, up 372%, adjusted EBITDA matched, amounting to $1.3 billion in Q4, and cash reserves swelled to $9.3 billion as of Dec. 31, 2024. Operating cash flow more than doubled to $2.5 billion, even as long-term debt climbed to $4.2 billion.
Yet, challenges remain. A 9% sequential dip in stablecoin transaction fees due to lower fees on high volumes and interest rates, raised concerns. And while competition is heating up, Coinbase remains in control, leaning on strategic agreements to stabilize revenue. With regulatory winds shifting in its favor and institutional players deepening their engagement, Coinbase is poised to remain resilient.
Coinbase’s management eyes Q1 2025 with cautious optimism, projecting subscription and services revenue between $685 million and $765 million. Innovation remains key, with Coinbase One Premium in focus and global expansion on the horizon. Yet, market turbulence lingers, a stark reminder that crypto’s volatility is far from slowing down.
COIN's earnings ride is shaping up like a crypto chart - sharp climbs, brief dips, and a bullish outlook ahead. Analysts tracking Coinbase peg Q1 revenue at around $2.2 billion, with EPS hitting $2.18, a solid 32.1% year-over-year jump. However, the road gets bumpy in fiscal 2025 with a projected 3.7% annual dip in EPS to $7.32. Yet a strong 19.1% surge to $8.72 in fiscal 2026 suggests the long game looks bright.
What Do Analysts Expect for Coinbase Stock?
Wall Street took notice after Coinbase's Q4 earnings result, tweaking price targets to match the crypto giant’s momentum. For instance, JMP Securities analyst Devin Ryan upped the price target to a street-high $475 – implying upside potential of 117% - and kept an "Outperform" rating.
The brokerage firm sees Coinbase as a key beneficiary of rising digital asset enthusiasm, standing at a pivotal moment as the industry awaits regulatory clarity. While new competition may emerge, JMP believes clearer policies on taxes, reserves, and oversight will ultimately strengthen Coinbase’s position. In this shifting landscape, the firm remains bullish, seeing Coinbase as a frontrunner in the next phase of crypto evolution.
Last month, HC Wainwright reaffirmed a "Buy" rating on the shares, maintaining its price target on COIN at $350.
However, CFRA’s Michael Elliott is not sold on COIN’s trajectory. CFRA cut its price target to $230 while keeping a “Hold” rating, citing uncertainty over the planned strategic reserve. Even with regulatory tailwinds, skepticism lingers - proving that in crypto, even good news can be a double-edged sword.
Wall Street’s take on COIN is generally optimistic. Overall, the stock has a “Moderate Buy” consensus rating. Out of the 22 analysts in coverage, seven recommend a “Strong Buy,” one suggests a “Moderate Buy,” 13 stay cautious with a “Hold,” and the remaining one has a “Strong Sell” rating. COIN’s mean price target of $326 implies the stock has upside potential of 50.5% from the current price levels.
