Coinbase is riding a wave of positive momentum as the Rothschild upgrade validates its financial evolution, as the massive deal with Samsung coincides with putting services directly into the hands of tens of millions of new users.
summary
- Coinbase stock rose 2.59% to $381.80 after Rothschild upgraded it to Buy.
- Rothschild said Coinbase’s business is driven by institutional trading, USDC revenue, and the base network, shifting beyond retail fees.
- Meanwhile, the groundbreaking Samsung Wallet integration will bring Coinbase services to 75 million Galaxy devices.
Shares of Coinbase Global, Inc. (COIN) rose more than 2% on October 3, a move triggered by a strategic “buy” upgrade from financial institution Rothschild & Company and the simultaneous announcement of a groundbreaking merger with Samsung.
Notably, Rothschild’s revised outlook, which includes a $417 price target, is dependent on Coinbase’s success in diversifying beyond its core trading business, while the deal with Samsung will see its services integrated directly into the native wallets of 75 million Galaxy devices in the United States.
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From upgrades to embeds: What’s driving Coinbase’s momentum
Rothschild’s central argument is that the market continues to value Coinbase as a direct reflection of Bitcoin’s price, overlooking a fundamental business model shift. The agency notes that retail transaction fees, which once accounted for about 90% of revenue, are expected to fall to nearly 50% next year.
Rothschild says this rebalancing action is being driven by rapid growth in institutional trading, derivatives, and a range of subscription and services revenues, including a large share of revenue from the USDC stablecoin and fast-growing Layer 2 network Base. Rothschild acknowledges that fee compression is a reality of the industry, but argues that it will be more than compensated for by increased overall trading volume and deeper institutional penetration.
This optimistic view of Coinbase is in stark contrast to Rothschild’s assessment of its peers, indicating a clear preference for diverse platforms. The agency initiated coverage of USDC issuer Circle with a neutral rating. While acknowledging the stablecoin’s overwhelming $73 billion supply, Rothschild noted that Circle relies heavily on interest income from its reserves, a significant portion (more than 60%) of which is paid to distribution partners like Coinbase.
Robinhood’s outlook is even more dire, with a repeat sell rating. The bank warned that its crypto economy remains overly cyclical, dependent on retail traders and vulnerable to fee pressure as the market matures.
The Samsung combination announced Friday serves as a concrete implementation of this diversification and could be the largest single consumer distribution business in Coinbase’s history. The deal will link Samsung Pay to Coinbase accounts, placing cryptocurrency trading and payment capabilities alongside everyday tools like transportation passes and digital keys, and standardizing the use of digital assets by a large mainstream audience.
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