Coinbase (COIN) Stock: Why BofA Sees Buying Opportunity After 40% Drop

Table of Contents

TLDR

Bank of America upgraded Coinbase stock to Buy with $340 price target following 40% pullback from July highs
The upgrade focuses on expanding addressable market and faster product launches despite crypto volatility
Third quarter revenue surged 55% to $1.9 billion with subscription services at 40% of total
Barclays cut price target to $258 citing lower trading volumes and slower USDC growth expectations
Wall Street consensus shows 65% of analysts rate it Buy with 55% upside potential

Bank of America issued a Buy rating on Coinbase Global Inc. stock on January 8. The upgrade comes after shares dropped 40% from their July peak.

The firm maintained its $340 price target. Analysts attributed the decline to broad crypto market weakness rather than company problems.

BofA highlighted expanding market opportunities for Coinbase. The platform’s product launch pace has accelerated recently.

Management is pushing toward an “everything exchange” model. Recent additions include stock and ETF trading plus prediction markets.

These new offerings reduce reliance on crypto trading fees. The strategy creates cross-selling opportunities with existing users.

Barclays took a different view around the same date. The firm kept its Equal Weight rating but lowered its target from $291 to $258.

Their Q4 model anticipates several headwinds. Trading volumes are expected to decline from prior quarters.

USDC stablecoin growth may slow down. Crypto price volatility remains a concern for near-term performance.

Coinbase reports Q4 results in late February. That earnings call will be critical for the stock’s direction.

Third quarter results demonstrated strong momentum. Revenue climbed 55% year-over-year to $1.9 billion.

Adjusted EBITDA rose 78.3% to $801 million. The revenue composition continues shifting favorably.

Subscription and service revenue now makes up 40% of the total. This change away from volatile trading fees stabilizes earnings.

Assets on the platform reached $516 billion. Institutional investors drove much of this growth.

Stablecoins became a major revenue source. This segment produced $355 million in Q3 alone.

Coinbase holds $15 billion in USDC on its platform. These balances generate interest income for the company.

Growing USDC use for payments keeps funds on platform longer. This creates predictable recurring revenue.

The company serves as custodian for most U.S. spot Bitcoin and Ethereum ETFs. This role generates steady custody fees as ETF assets grow.

Regulatory clarity is improving for crypto firms. U.S. lawmakers scheduled important hearings and votes for January 2026.

These proceedings will establish clearer digital asset rules. Enhanced regulation could encourage more institutional participation.

Coinbase submitted disclosures for Europe’s MiCA framework. The company is working toward EU compliance.

Wall Street sentiment tilts positive overall. About 65% of covering analysts rate the stock Buy.

Average price targets suggest 55% upside potential. The consensus sees long-term value despite short-term volatility.

BofA views the current pullback as a buying opportunity. The firm believes fundamentals remain intact while the stock trades lower.

Product expansion efforts continue at a rapid pace. The everything exchange vision is taking concrete shape through new features.

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