coindesk.com
Coinbase’s (COIN) recent slump is an “air pocket,” not a warning sign, investment bank William Blair said in a report on Monday.
The bank reiterated its outperform rating on the stock and urged investors to treat the crypto sell-off as a buying opportunity.
Coinbase shares were 2.6% higher in early trading, at $246.53.
The report made the same argument for outperform-rated Circle (CRCL), down nearly 80% from its 52-week high even as $USDC’s market cap holds firm.
With both firms tied to $USDC, William Blair expects their stocks to move together, positioning Coinbase as the broader crypto gateway and Circle as the cleaner bet on $USDC’s growth, particularly in cross-border B2B payments.
Bitcoin’s drop doesn’t alter that view, according to analysts Andrew Jeffrey and Adib Choudhury. The report attributed the volatility to an immature market where concentrated holdings and a rush of first-time exchange-traded fund (ETF) buyers exaggerate swings.
The bank's analysts see this as growing pains, not a broken thesis, and argued that deeper liquidity and regulatory clarity will eventually help bitcoin settle into a mainstream portfolio role.
Short-term weakness may pressure Coinbase’s trading revenue, but the analysts said the company is still gaining U.S. spot share and building a global derivatives business that adds diversification and cushions volume declines. With roughly one-third of costs variable, the firm expects Coinbase to manage margins while continuing to invest in its platform.
The report also highlighted Coinbase’s rising Subscription & Services (S&S) revenue, now about 40% of total revenue, supported by a resilient $74 billion $USDC market cap despite a broad crypto-market drop.
The bank remains confident in its $777 million fourth-quarter S&S estimate, driven in part by $USDC rewards, and says staking revenue should benefit from higher yields and fewer redemptions during market drawdowns.
Read more: Coinbase to Snap up Solana-Based DEX Vector as Acquisition Spree Continues