Coinbase Shares Surge 4% to All-Time High Despite Downgrade

Coinbase Global, Inc. (COIN) shares surged over 4% to reach an all-time high of $389 on Thursday, despite a double downgrade from H.C. Wainwright. The investment firm downgraded the stock from buy to sell, citing concerns about slowing spot trading activity and an overvalued stock price. Analyst Mike Colonnese noted that while Coinbase is viewed as a leading crypto exchange, the current valuation has outpaced near-term fundamentals. This dramatic rise in the stock price, approximately 150% since April lows, has led some analysts to question the sustainability of these gains.

Bitcoin's rally to a new record above $113,000 on Thursday contributed to the rise in Coinbase shares. Most analysts on Wall Street maintain neutral or bullish ratings on Coinbase stock. Barclays recently raised its price target from $202 to $359, anticipating a weaker second quarter report. Oppenheimer continues to rate the stock as outperform, seeing long-term growth potential despite near-term challenges. Coinbase has delivered strong returns for investors this year, with a year-to-date gain of 52.58% and a one-year return of 72.55%. These returns far exceed the S&P 500’s gains of 6.75% year-to-date and 11.45% over one year. The three-year return stands at an impressive 528.39%.

Coinbase announced plans to acquire Deribit, the leading global crypto-options exchange by open interest and trading volume. This move aims to strengthen Coinbase’s position in the derivatives market, particularly targeting growth outside the United States. The acquisition could expand Coinbase’s revenue base and international footprint. The company is also launching new products including cbXRP and cbDOGE, aligning with its goal to become the primary platform for enterprises integrating cryptocurrency. Coinbase continues investing heavily in its Ethereum-based Layer 2 network called Base, which offers reduced fees and improved scalability for users. The company launched a $5 million bug bounty program to enhance Base’s security and is integrating privacy tools from the recent Iron Fish acquisition into the platform.

Global expansion remains a key priority for Coinbase. The exchange is entering emerging markets including Argentina and India and has secured regulatory approvals in Spain, France, Singapore, and Bermuda. This international push helps reduce dependence on U.S. operations. Coinbase trades at a price-to-earnings ratio of 63.7, well above the industry average of 22. This elevated valuation has drawn scrutiny from some market observers. GuruFocus assigns a one-year fair value estimate of $213.72 for the stock, implying a potential 43% downside from current levels. The average one-year price target from 28 analysts stands at $301.66, suggesting many see limited upside from Thursday’s closing price. Second quarter 2025 earnings are scheduled for release on July 31 after market close. The company will hold an investor Q&A session following the announcement. The Zacks Consensus Estimate for 2025 and 2026 earnings has moved higher recently, with estimates increasing by 22.8% and 3.5% respectively over the past 30 days. H.C. Wainwright expects subscription and services revenue to exceed expectations, including income from staking and custody services. However, the firm anticipates transaction revenue will disappoint due to lower trading volumes, which could weigh on overall quarterly results. Coinbase stock traded at $378.50 at midday on July 10, near its 52-week high of $382.00. The shares closed Thursday at their highest level ever recorded.