Let's Break It Down
Stablecoins' Surge to Benefit Coinbase, According to Benchmark, Makes Stock a Wise Investment
Investment banking firm Benchmark gave Coinbase a "buy" rating, predicting a price target of $252. This bold move came alongside coverage initiation in a Wednesday note, praising industry-boosting legislation and Coinbase's potential benefits from the pending stablecoin bill.
As of early afternoon Wednesday, Coinbase was trading at $198, marking a 4% increase. Despite year-to-date shares sliding 20%, the bullish outlook centers on a yet-to-be-enacted stablecoin bill.
Two key legislative pieces, the House STABLE Act and the Senate GENIUS Act, could reshape the stablecoin market. Both bills aim to create a comprehensive regulatory framework for stablecoins. The STABLE Act has been passed by the House Financial Services Committee, with the GENIUS Act making its way to the Senate floor.
What's at stake for the crypto industry? If enacted within the next 90 days, as hoped, the bills may generate significant increases in Coinbase's income, particularly since the exchange disclosed $910 million in full-year stablecoin revenue for 2024. That figure represents a 31% growth compared to the previous year.
Coinbase categorizes stablecoins alongside subscriptions and services revenue. Wall Street giants, such as Bank of America, have hinted at entering the stablecoin arena once favorable frameworks are enacted. This could bring thousands of potential competitors.
To stay competitive, Coinbase is focusing on dethroning Tether's USDT, with an industry-leading market capitalization of $145 billion. CEO Brian Armstrong has declared a new "stretch goal," with fostering partnerships and adding payments support for USDC being the key strategies.
Disclaimer: Edited by James Rubin
Daily Debrief Newsletter
Exploring the Crystal Ball - Stablecoin Regulation Insights
The current stablecoin bill debate revolves around two major bills: the House STABLE Act (H.R. 2392) and the Senate GENIUS Act. Both aim to forge a regulatory pathway for stablecoins within the U.S. market.
The STABLE Act, which has passed the House Financial Services Committee, outlines regulations for issuing and trading dollar-backed stablecoins. The GENIUS Act, meanwhile, focuses on licensing, reserve maintenance, and consumer protection in bankruptcy proceedings.
With President Donald Trump aiming to sign both bills by August, a favorable regulatory environment for digital assets may be on the horizon, making the U.S. a hub for crypto innovation. The successful passage and signing of these bills would provide clarity and stability, potentially benefiting companies like Coinbase by offering a clearer path for stablecoin operations.
- The investment banking firm Benchmark has given Coinbase a "buy" rating, predicting a price target of $252, praising industry-boosting legislation and Coinbase's potential benefits from the pending stablecoin bill.
- As of early afternoon Wednesday, Coinbase was trading at $198, marking a 4% increase, with the bullish outlook centering on a yet-to-be-enacted stablecoin bill.
- Two key legislative pieces, the House STABLE Act and the Senate GENIUS Act, could reshape the crypto market, aiming to create a comprehensive regulatory framework for stablecoins.
- Coinbase, with a focus on dethroning Tether's USDT, has declared fostering partnerships and adding payments support for USDC as the key strategies for staying competitive in the stablecoin market.
- The successful passage and signing of the STABLE Act and the GENIUS Act by August, as aimed by President Donald Trump, may make the U.S. a hub for crypto innovation, offering a clearer path for stablecoin operations.
- Bank of America and other Wall Street giants have hinted at entering the stablecoin arena once favorable frameworks are enacted, potentially bringing thousands of potential competitors.
- If enacted within the next 90 days, the bills may generate significant increases in Coinbase's income, particularly since the exchange disclosed $910 million in full-year stablecoin revenue for 2024, representing a 31% growth compared to the previous year.
- The integrated approval of the STABLE Act and the GENIUS Act in the crypto market could lead to broadly positive impacts on the technology, finance, and investing sectors, potentially driving growth in the crypto exchange market and the overall crypto industry.
