Coinbase eyes record close as analysts raise price target to $510, call company 'Amazon of crypto'

Coinbase (COIN) saw a 3% gain, rising to $355 at the close of the market on Wednesday, its highest close since November 2021, following Bernstein analysts raising their price target for the crypto exchange's stock to $510.

Bernstein analysts predict Coinbase stock to hit $510

Bernstein analysts, led by Gautam Chhugani, have raised their price target for Coinbase stock to $510, up 65% from the previous target of $310 set in Q1, according to a note shared with investors on Wednesday. 

They cited improved earnings forecasts and emerging growth catalysts as major factors for their price adjustment while noting that their bear case had not materialized. The analysts stated that Coinbase is a highly "misunderstood" company as investors have yet to maximize the exchange's position as a major crypto stock.

It highlighted several key areas of progress for Coinbase over the past year, including being the only crypto company to feature in the S&P 500, operating the largest stablecoin business among exchanges, its acquisition of the largest crypto options exchange, Deribit, and the growth of its Layer-2 network, Base.

The analysts also noted that Coinbase continues to dominate crypto trading in the US despite increased pressure from competitors, calling it the "Amazon of crypto financial services."

"As the regulatory headwinds for the crypto industry have receded, Coinbase has emerged as the premier crypto financial platform, consolidating market share in the US," Gautam Chhugani said in the note.

Coinbase will also benefit from the GENIUS stablecoin legislation, which passed the Senate last week, and the upcoming CLARITY bill, which has also garnered the attention of lawmakers, according to the analysts.

COIN has surged 40% since the GENIUS bill passed the Senate. Investors are banking on a steady growth of Coinbase's stablecoin business, which generates 15% of the exchange's revenue. The company serves as the largest distributor of Circle's USDC, receiving 50% of its reserve gross revenue.

Coinbase also unveiled a new class of product suites and innovations at its recent State of the Crypto Summit in New York.

COIN stretched its rally with a 3% gain on Wednesday, closing the day at $355.37, a few hundred cents shy of its record close of $357.39 on November 9, 2021. The stock earlier surged 12% on Tuesday and closed at $344.95.

The rise can also be attributed to Coinbase securing regulatory approval from Luxembourg, making it the first major crypto exchange to operate under the European Union's (EU) Markets in Crypto Assets (MiCA) regime.