Coinbase's Stablecoin Push vs. Circle's Revenue Risks Signal Crypto's Split

Rothschild & Co Redburn upgraded Coinbase Global (NASDAQ: COIN) to "Buy" on October 3, 2025, raising its price target to $417 from $372, representing an estimated 12.1% upside relative to its trading price of $378 at the time of the announcement title1^[1]. The firm cited Coinbase's expanding revenue diversification and growth in stablecoin-related income as key drivers, particularly through its role in the USDC ecosystem. Analysts noted that while lower U.S. interest rates could temporarily pressure short-term revenue, the projected expansion of USDC's market capitalization is expected to offset these challenges title1^[1]. The upgrade reflects confidence in Coinbase's strategic shift toward subscription and service-based revenue, which now includes institutional trading, derivatives, and custody services title3^[3].

In parallel, Rothschild initiated coverage of Circle Internet Group (CRCL) with a "Neutral" rating and a $136 price target, despite the company's dominance in the stablecoin market with a $73 billion USDC supply. The bank highlighted concerns about Circle's revenue-sharing model, under which over 55% of its interest income from reserve assets is distributed to partners like Coinbase title4^[4]. This dynamic, combined with regulatory uncertainties and high valuations, could delay meaningful upside for the stock. Meanwhile, Rothschild reiterated a "Sell" rating on Robinhood (NASDAQ: HOOD), arguing its business model-reliant on cyclical retail trading activity-is overvalued and vulnerable to margin compression as the market matures title1^[1].

The diverging assessments underscore broader trends in the crypto sector. Coinbase's stock is increasingly viewed as a diversified platform benefiting from institutional adoption and stablecoin growth, whereas Circle and Robinhood face questions about their reliance on volatile revenue streams. For example, USDC's market cap grew by 14.3% since December 2023, outpacing USDT's 8.7% increase, driven by expanded liquidity programs and Coinbase's Layer-2 network, Base title5^[5]. Analysts at Coinbase Research also projected the stablecoin market could reach $1.2 trillion by 2028, with potential spillover effects on U.S. Treasury yields and debt markets title8^[7].

Institutional sentiment aligns with Rothschild's upgrade. Over 2,005 funds hold Coinbase shares, with institutional ownership rising by 20.15% in the past three months. Key holders like Vanguard and Geode Capital increased their stakes by double digits, reflecting growing confidence in the firm's long-term positioning title2^[2]. Conversely, Robinhood's recent performance-despite a 44.49% one-month gain-remains fragile, with a max drawdown of -90.21% and a P/E ratio of 30.34, signaling high volatility .

The ratings highlight the crypto sector's evolving landscape. While Coinbase is positioned to capitalize on stablecoin adoption and regulatory clarity (e.g., the U.S. GENIUS Act), Circle's revenue-sharing structure and Robinhood's retail-centric model remain exposed to macroeconomic and regulatory risks. Analysts emphasized that investors should prioritize platforms with scalable, diversified revenue streams over those dependent on short-term trading dynamics title4^[4].