Coinbase Stock Rally Signals Renewed Wall Street Confidence

Goldman Sachs upgraded Coinbase Global (COIN) to 'Buy' from 'Neutral' in early January 2026, raising its 12-month price target to $303 per share. The move reflects confidence in Coinbase's transition from a trading-focused business to a crypto infrastructure provider with steadier revenue streams. Coinbase's shares responded with an 8% gain following the upgrade.

Coinbase CEO Brian Armstrong outlined the company's 2026 strategy on New Year's Day, focusing on three pillars: expanding the 'everything exchange' across crypto, equities, and commodities; scaling stablecoins and payments; and bringing more users on-chain through the Base blockchain according to company announcements. This strategy positions Coinbase as a comprehensive financial app, competing directly with platforms like Robinhood and Interactive Brokers.

Stablecoin revenue grew significantly in 2025, contributing 22% of Coinbase's revenue in Q2 2025. USDC alone generated $332.5 million during that quarter. The global stablecoin payment volume reached $9 trillion in 2025, an 87% annual increase, signaling growing adoption.

Why Did This Happen?

Goldman Sachs cited Coinbase's shift toward infrastructure services like custody, staking, and compliance as a key factor in its upgrade. These services generate revenue regardless of crypto price volatility, making them more predictable and less cyclical compared to pure trading revenue .

Coinbase's subscription and services business now accounts for about 40% of total revenue, up from less than 5% in 2020 . This diversification strengthens Coinbase's long-term growth potential and insulates it from the sharp swings of the crypto market.

Coinbase also announced plans to expand into prediction markets through a partnership with Kalshi and the acquisition of The Clearing Company, expected to close in January 2026. These moves align with its broader strategy to offer a one-stop financial platform.

How Did Markets React?

The upgrade from Goldman Sachs came as Coinbase shares had underperformed the broader market in 2025. The S&P 500 rose 15% over the past 12 months, while Coinbase's stock fell 13% . Analysts viewed the price target of $303 as a 34% upside potential, offering an attractive entry point for investors .

Coinbase's shares surged 8% in response to the upgrade, closing at $254.92 on January 6, 2026. The rally reflected renewed optimism about Coinbase's strategic direction and its ability to capture growth beyond traditional crypto trading.

What Are Analysts Watching Next?

Goldman Sachs highlighted the importance of regulatory developments in 2026. A draft U.S. crypto market structure bill could either catalyze or hinder broader adoption, depending on its outcome. Coinbase has already invested heavily in compliance infrastructure, which analysts believe will position it well if regulatory clarity favors institutional players according to market analysis.

Tokenization and prediction markets are also seen as key growth drivers. Institutions are increasingly adopting blockchain for settling traditional assets like stocks and bonds. Coinbase's Base App is being positioned as a platform for these tokenized assets, offering faster settlement and lower counterparty risk.

Stablecoin adoption is another focus. Coinbase is working with Google to integrate stablecoin payment rails into AI platforms. If successful, this could help shift mainstream payments toward blockchain-based systems and increase Coinbase's role in the global financial ecosystem.

Goldman Sachs also downgraded eToro Group Ltd to 'Neutral' from 'Buy', citing rising competition and higher customer acquisition costs . This contrast highlights Coinbase's stronger position in the market and its ability to scale infrastructure services efficiently .

Overall, the combination of structural growth, regulatory clarity, and expanding use cases positions Coinbase as a key player in the evolving crypto and fintech landscape.