TipRanks
5 min read
In This Article:
Coinbase Global (COIN) stock is flying after two pivotal developments: the U.S. Senate’s passage of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act and Coinbase’s push to gain SEC approval for tokenized equity trading.
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Both have massive implications for the crypto economy-focused financial technology company. While the regulatory skies are clearing for Coinbase, broader market adoption of digital assets, competition, and high expectations are reasons for caution in the years ahead, leaving me cautiously optimistic on its stock.
In its most recent quarterly report, COIN announced earnings per share of $0.24, with revenues of $2 billion, which disappointed analysts who had expected EPS of $1.94. The company’s forward P/E ratio is currently 53.6 compared to the sector average of 10.36. Despite this result in early May, COIN stock has gone on to vault beyond $300 per share.
Regulatory uncertainty has long been a major overhang for Coinbase and other crypto-centric firms, but the recent progress of the GENIUS Act marks a potential turning point. Passed by the Senate on June 17 with strong bipartisan support (68–30 vote), the Act lays out the first federal framework for stablecoin regulation, including key provisions like 1:1 reserve backing in safe assets (e.g., U.S. dollars) and anti-money laundering compliance.
Crucially for Coinbase, the bill also permits non-bank entities to issue stablecoins—a major win, given the company’s deep partnership with Circle Internet Group (CRCL), the issuer of USD Coin (USDC). The company’s shares rose 33% in late Wednesday trade last week and are now trading 87% higher.
As the second-largest dollar-backed stablecoin, USDC plays a growing role in Coinbase’s business model. In the most recent quarter, USDC revenue reached $298 million, accounting for roughly 15% of Coinbase’s total revenue and growing at an impressive 51% year-over-year, more than double the company’s overall revenue growth of 23%.
If enacted into law, the GENIUS Act could help legitimize and accelerate Coinbase’s stablecoin strategy, strengthening a rapidly expanding revenue stream.
Treasury Secretary Scott Bessent recently projected that the stablecoin market could grow to $3.7 trillion in the coming years—a staggering figure that underscores the potential of this emerging asset class.
