Coinbase: A Surprising Champion Of The Trump Trade, Eyes New Stock Records

A significant turning point for Coinbase came in February when the SEC dropped a lawsuit that had been pending for two years, which accused the company of operating as an unregistered securities exchange.

This victory was followed by Coinbase becoming the first cryptocurrency firm to join the S&P 500, further solidifying its status in the market.

Investors are particularly optimistic as Congress prepares to discuss three bills aimed at clarifying the regulatory framework surrounding the cryptocurrency sector. The legislation has garnered broad support among crypto advocates.

Additionally, the SECs decision to move crypto oversight to its more favorable Cyber & Technology unit and repeal a rule requiring financial institutions to treat crypto custody holdings as liabilities has further boosted market confidence.

Positive Long-Term Outlook For Coinbase

Looking ahead, analysts from Benchmark Equity Research anticipate that Coinbase will successfully petition the SEC to offer tokenized equities on its platform. CEO Brian Armstrongs “close ties to Trump” are expected to play a role in this endeavor.

Moreover, Coinbase is well-positioned to benefit from the Clarity Act, one of the bills under consideration, which aims to enhance institutional confidence in digital asset trading and holding.

Benchmark has maintained a Buy rating for Coinbase, setting a price target of $421. However, some analysts caution that the positive developments may already be reflected in the stocks current price.

Owen Lau of Oppenheimer recently assessed the likelihood of the Clarity Act passing at 70% and slightly adjusted his estimates for Coinbase‘s trading volume ahead of the company’s earnings report scheduled for July 31.

Even if the upcoming earnings release disappoints, experts believe that the underlying momentum of Coinbase will not be significantly affected. Oppenheimer has reiterated an Outperform rating, raising its price target to $417 from a previous $395.