Investing.com -- Rosenblatt initiated coverage of Coinbase (NASDAQ:COIN) with a Buy rating and $305 price target on Friday, citing the potential for significant regulatory shifts under the new U.S. administration.
Analysts believe that "the new administration will be a huge positive catalyst for crypto as long-awaited regulation will drive full-blown institutional adoption."
The firm sees regulatory clarity as a major tailwind for Coinbase, particularly as the Securities and Exchange Commission (SEC) becomes "infinitely more friendly" toward digital assets.
They explain that the shift could lead to the dismissal of state-level lawsuits and allow Coinbase to expand its staking and blockchain services.
Rosenblatt also highlights Coinbase’s dominant market position, calling it "the clear blue chip in the sector," and believes it is best positioned to benefit from the next phase of crypto adoption.
Despite a 30% decline in the stock over the past month due to political uncertainty and macroeconomic factors, Rosenblatt views this as a buying opportunity. "Fortunately, we think it is more of a 'Crypto Spring' right now and like the stock here after the pullback," the analysts wrote.
Coinbase has also been diversifying its revenue streams, reducing its reliance on trading fees. Non-trading revenue grew 71% year-over-year in the fourth quarter of 2024, and Rosenblatt expects this trend to continue.
While competition from traditional financial institutions (TradFi) may increase, analysts believe Coinbase’s "decade-plus head start and comprehensive product suite" will allow it to maintain leadership.
The firm’s $305 price target is based on a 15.3x multiple of its 2026 adjusted EBITDA estimate, reflecting more than 40% upside from current levels. Rosenblatt sees the expanding use of blockchain and stablecoins as additional growth drivers, further solidifying Coinbase’s long-term potential.
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