Coinbase’s (COIN) Weak Q2 Is a Blip, Not a Breakdown, Says Benchmark

Coinbase’s (COIN) softer-than-expected second quarter outcomes triggered a sharp Friday sell-off, however Wall Street dealer Benchmark says the drop is a shopping for alternative, not a pink flag.

Analyst Mark Palmer reiterated his purchase score and $421 value goal. He argued that the alternate’s long-term funding case stays intact as the corporate continues to construct foundational crypto infrastructure.

The shares are 1.8% greater in early buying and selling Monday, after having closed 16.7% decrease on Friday.

Benchmark highlights 5 catalysts supporting its thesis. First, Coinbase’s revenue-sharing settlement with Circle on USDC reserves positions it to learn from stablecoin adoption, particularly after the U.S. handed the GENIUS Act.

Second, its institutional choices, together with prime brokerage, crypto-as-a-service and derivatives, are well-timed as a result of the CLARITY Act could spur additional adoption.

Third, the agency is creating a crypto “super app” integrating buying and selling, funds, non-fungible tokens (NFTs), decentralized finance (DeFi) and developer instruments, a distinctive product within the U.S. market.

Fourth, the mixing of decentralized exchanges expands token entry past centralized listings.

Finally, Coinbase’s estimated $360 million in July transaction income, a 44% soar from its month-to-month common in the course of the second quarter, alerts a potential restoration in crypto exercise.

Benchmark concludes the quarter’s miss is short-term noise. Coinbase’s evolving platform, underpinned by regulation tailwinds and rising institutional demand, factors to long-term progress.

Read extra: Coinbase Slides Nearly 20% in Worst Weekly Performance Since September 2024