Coinbase Develops 'Universal Exchange': Will COIN Stock Rebound?
AI Podcast
Deutsche Bank maintains a "Buy" rating on Coinbase, targeting $340, viewing its "universal exchange" strategy as a key growth driver beyond spot trading. Despite a recent stock price decline following the announcement of new products like stock trading and perpetual contracts, analysts believe this diversification will enhance revenue and competitiveness. However, Coinbase faces significant competition in both crypto and emerging markets. The bank suggests Coinbase's stock performance is heavily influenced by Bitcoin's price, indicating a recovery to prior peaks will likely require an overall crypto market improvement.
TradingKey - Coinbase's transformation from a single spot trading platform to a universal exchange met with a cold reception from the market, yet Deutsche Bank remains bullish on this strategy.
On Wednesday (December 17) local time, Coinbase (NASDAQ: COIN), the largest cryptocurrency exchange in the U.S., announced the launch of several new products , including stock trading, prediction markets, perpetual contracts, and more, thereby solidifying its status as a 'universal exchange'.
Coinbase aims to build a moat and capture more market share, yet Coinbase ( COIN) stock performance remains unsatisfactory. According to market data, Coinbase's stock fell over 3% on the day, closing at $244, once again retreating to its previous low.
Coinbase Stock Chart, Source: TradingView.
Despite Coinbase announcing positive developments, COIN's stock fell instead of rising, primarily dragged down by the decline in Bitcoin ( BTC) price. Over the past 24 hours, Bitcoin rallied and then pulled back, hovering around its 2025 low area of $85,000.
Specifically, the decline in Bitcoin's price not only affects Coinbase's exchange trading volume, thereby impacting its revenue, but also directly leads to a decrease in the value of its Bitcoin holdings. According to CoinGecko data, Coinbase currently holds 14,500 Bitcoins, ranking twelfth globally.
Bitcoin Price Chart, Source: TradingView.
Although crypto exchange Coinbase's initiative to build a universal exchange has not yet gained market recognition, nor has it been reflected in its stock price, however, Deutsche Bank is bullish on this development strategy for Coinbase , giving it a 'Buy' rating and a target price of $340.
From Deutsche Bank's perspective, the 'universal exchange' is a crucial engine driving Coinbase's future growth, expanding it from a single cryptocurrency spot trading platform into a comprehensive platform. Analysts believe that 'this strategy will help Coinbase enhance revenue diversification and market competitiveness, achieve sustainable growth across multiple business areas, and support its long-term fundamentals.'
From a business coverage perspective, Coinbase's comprehensive expansion could indeed generate more revenue, but this is merely an ideal, and reality may differ. Firstly, Coinbase continually faces strong competitors in the traditional cryptocurrency trading sector, such as Binance ( BNB ); secondly, Coinbase is beginning to explore new businesses such as stock tokenization and prediction markets, but also faces competition from Robinhood (HOOD), Kraken, and Gemini.
It is clear that Coinbase's future still holds many uncertainties, which may be a significant reason for the subdued market performance. In other words, relying solely on its own positive developments, it is unlikely to push its stock price back to its peak of $440 in the short term. To achieve this goal, Coinbase must also rely on a rise in Bitcoin's price or an overall improvement in the crypto market.
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
