SKN | Coinbase Grabs Second Buy Rating in a Week as BofA Sees 38% Upside

Coinbase’s stock (NASDAQ: COIN) picked up its second analyst “buy” rating in just five trading days, as Bank of America joined Goldman Sachs in lifting the exchange’s outlook amid broader macro shifts in crypto markets. BofA analysts pointed to an expanded product roadmap, easing tax-loss selling, and a valuation discount as key reasons for its bullish stance, which implies roughly 38 percent potential upside from current levels. The dual upgrades arrive amid heightened focus on how cryptocurrency infrastructure firms can weather volatility in digital asset prices and regulatory headwinds.

Market Reaction: Stock, Short Interest, and Volatility

The COIN share price has been volatile through 2025, trading as low as the mid-150s and as high as over 400, marking a roughly 176 percent range in prices over the course of the year. While the stock is still down modestly on a 12-month basis, the recent pullback of nearly 40 percent from July highs has attracted renewed attention from institutional analysts.

Banks boosting their guidance have had a measurable impact on market sentiment. Goldman Sachs initiated its buy rating earlier in the week when COIN briefly jumped around 8 percent on that upgrade alone, indicating that positive analyst coverage can translate into real shifts in positioning, particularly among hedge funds and other quant-driven strategies. Meanwhile, short interest — the amount of outstanding shares sold short — has roughly doubled year-over-year, a setup that BofA said could amplify upside if sentiment shifts.

Despite short-term gains tied to upgrades, crypto price volatility continues to spill over into equities tied to the ecosystem. Bitcoin and Ethereum remain choppy after recent pullbacks, and broader crypto market volatility has pressured liquidity and trading volumes, an element that affects revenue forecasts for Coinbase since a substantial portion of its fees is tied to transaction activity.

Strategic Implications: Product Expansion and Adoption Angle

BofA’s bullish note underlined Coinbase’s transition from a pure spot exchange to a broader financial infrastructure platform, highlighting expansion into tokenization of real-world assets, prediction markets, and other nascent products. Central to the bank’s thesis is Base, Coinbase’s Ethereum layer-2 network, which BofA views as a potential catalyst if monetization ramps up with a future token or developer ecosystem growth.

This thematic shift reflects a longer-term narrative in crypto markets: that exchanges must evolve beyond trading fees to diversify revenue streams through subscriptions, custody services, decentralized finance integrations, and product cross-sell opportunities. That said, some analysts still point to near-term risks tied to execution, competitive pressures, and regulatory uncertainty, cautioning that expansion initiatives must translate into sustainable earnings before they meaningfully alter the valuation trajectory.

Investor Sentiment and Structural Trends

The dual upgrades to buy ratings have generated a subtle shift in institutional sentiment toward regulated crypto equities. Analysts framing the crypto adoption cycle as being in the early innings reflect a belief that digital asset infrastructure demand will continue to grow as more capital moves onchain.

However, this narrative coexists with caution. Potential headwinds flagged include a possible return of Binance to the U.S. market, further crypto price corrections, and the broader macro outlook for risk assets in 2026. For many institutional investors, sentiment hinges on balancing optimism about adoption and innovation with the reality of trading volume sensitivity to broader crypto cycles.

Forward-Looking Perspective

Looking ahead, key variables to monitor include Coinbase’s ability to execute its product expansion roadmap, stabilize or grow transaction volumes, and demonstrate that new revenue streams can offset periods of muted trading activity. Additionally, how regulatory clarity evolves, particularly around crypto securities, stablecoins, and onchain financial products, will be central to whether upgraded analyst views translate into realized gains.