Bank of America and Goldman Sachs Upgrade Coinbase (COIN) Stock to 'Buy'

Bank of America and Goldman Sachs have both upgraded Coinbase Global (COIN) to a 'buy' rating, citing the company's strategic shift toward crypto infrastructure and diversified offerings. The moves come amid renewed investor interest in Coinbase as it expands beyond pure trading services into areas like stablecoins, tokenization, and prediction markets. Both institutions raised their 12-month price targets, with Bank of America setting its target at $340 and Goldman Sachs at $303 according to recent reports.

The upgrades reflect analysts' growing optimism about Coinbase's ability to reduce its exposure to cyclical crypto trading volumes. Coinbase's infrastructure-focused products, such as its Ethereum layer-2 network Base and tokenization platform, are expected to generate more stable revenue streams. Goldman Sachs analyst James Yaro noted the firm's "structural growth" in infrastructure businesses, which now account for about 40% of its revenue.

Coinbase's shares responded positively to the upgrades, with COIN climbing nearly 8% following Goldman Sachs's move. The stock has fallen about 40% from its July 2025 peak, but the analysts argue that the pullback has created an attractive entry point. Bank of America cited elevated short interest and undervaluation as factors that could amplify upside if sentiment improves.

Why Did This Happen?

The upgrades stem from Coinbase's broader business strategy, which includes expanding into non-trading revenue streams. Goldman Sachs highlighted Coinbase's scale and brand strength as key advantages, which drive above-average revenue growth and market share gains. The firm also pointed to recent product rollouts, including prediction markets and international equity trading, as competitive differentiators according to Seeking Alpha.

Coinbase's December product showcase outlined its ambitions to become an 'everything exchange.' The company plans to integrate stock and ETF trading alongside crypto, expand prediction markets, and introduce equity-linked perpetuals outside the U.S. These moves align with its goal of offering a one-stop financial platform that can attract and retain a broader user base as reported by CoinDesk.

How Did Markets React?

Following the upgrades, COIN surged 8.6% in early trading, with shares closing at $254.92. The stock's performance reflects both the positive analyst sentiment and broader market optimism about crypto adoption in 2026. Coinbase's shares have been volatile throughout 2025, trading between $151.80 and $419.80 during the year according to The Block.

Analysts also noted the favorable technical setup for the stock. Short interest in COIN has nearly doubled year-over-year, which could lead to significant price appreciation if sentiment shifts. Tax-loss selling pressure from late 2025 has also subsided, further supporting the bullish case.

What Are Analysts Watching Next?

While the upgrades signal confidence in Coinbase's long-term potential, near-term risks remain. Goldman Sachs warned that competition and interest-rate sensitivity could weigh on margins in 2026. The bank also highlighted the importance of regulatory developments, particularly the U.S. Congress's draft crypto market structure bill. The bill's passage could provide a major boost to the crypto ecosystem, but its failure could be a headwind as reported by CryptoSlate.

Bank of America analysts expect Coinbase to benefit from favorable regulatory tailwinds, especially under the current administration, which has shown support for crypto innovation. The firm also pointed to the potential monetization of the Base network as a key catalyst. If a native Base token is introduced, it could raise billions in capital and accelerate decentralized finance development.

Investors are also watching Coinbase's ability to execute on its expansion plans. The company's product velocity has increased under CEO Brian Armstrong, but execution risks remain. Success in scaling new products like prediction markets and tokenization will be critical for long-term growth. The firm's expanding infrastructure businesses are expected to provide insulation from crypto price volatility as confirmed by ImmuneFi.