The cryptocurrency sector is anticipated to integrate more into the mainstream financial landscape in the U.S. as the regulatory framework evolves, positioning Coinbase (COIN) to take advantage of these favorable conditions, according to a report from broker Bernstein released Monday.
Bernstein has commenced coverage of the crypto exchange with an outperform rating and set a price target of $310. In early trading, shares fell by 2% to $185.20.
The report noted that clearer regulations will likely lead to increased competition for Coinbase from fintech firms, brokers, and banks.
However, the analysts, including Gautam Chhugani, suggest that a robust bull market and the growing dominance of U.S. onshore activities are expected to outweigh the pressures related to market share and pricing.
The enhancing regulatory environment under the new administration led by Donald Trump is regarded as a significant advantage for digital assets, with the President aiming to establish the U.S. as the “crypto capital of the world.”
Moreover, the Securities and Exchange Commission (SEC) has established a new task force dedicated to cryptocurrency, headed by Commissioner Hester Peirce, to create new regulations for the sector.
According to the report, Coinbase has successfully expanded its services beyond trading, establishing a strong foothold in U.S. dollar stablecoins and crypto yield services such as staking.
Bernstein predicts that Coinbase’s non-trading revenue will grow at a compound annual growth rate (CAGR) of around 31% from 2024 to 2026.
This growth is seen as providing a “solid counterbalance to the cyclical nature of trading revenues,” the report highlighted.
Recently, Coinbase obtained FIU registration, which the company indicated in a blog post earlier this month, clears the way for a comeback in the Indian market.