Benchmark: Coinbase Sell-Off Offers Entry Point, Not Cause for Alarm
Despite a disappointing second-quarter earnings report that sent Coinbase (COIN) shares tumbling 16.7% on Friday, brokerage firm Benchmark is doubling down on its bullish stance.
In a note to clients, analyst Mark Palmer reaffirmed his Buy rating and $421 price target, calling the weakness a short-term dip rather than a sign of structural issues. Shares edged 1.8% higher in early Monday trading, suggesting some stabilization following the rout.
Palmer maintains that Coinbase’s core investment case remains intact as it builds out critical infrastructure for the digital asset ecosystem. Benchmark cited five strategic drivers underpinning its outlook:
- USDC Revenue Agreement: Coinbase’s partnership with Circle offers upside exposure to stablecoin adoption, which could accelerate under the recently enacted GENIUS Act.
- Institutional Positioning: Products such as prime brokerage, crypto-as-a-service, and derivatives are well aligned with expected institutional demand following the CLARITY Act’s regulatory guidance.
- Crypto Super App in Development: Coinbase is rolling out a comprehensive digital asset platform integrating trading, payments, NFTs, DeFi, and developer tools—a potential U.S. market differentiator.
- Decentralized Exchange Access: Integration of decentralized exchanges (DEXs) enhances token availability and broadens market reach beyond centralized offerings.
- Rebounding Transaction Revenue: Estimated July transaction revenue reached $360 million, a 44% increase over Q2 monthly averages, signaling revived user activity.
Benchmark concludes the Q2 miss reflects temporary factors rather than a shift in Coinbase’s trajectory. With regulatory clarity improving and retail and institutional adoption showing signs of recovery, the firm views COIN as a long-term growth opportunity.
