Regulators Back Bullish as It Challenges Coinbase in Crypto's New Era

Bullish, a cryptocurrency exchange and owner of media platform CoinDesk, has seen its shares rise more than 5% ahead of its first quarterly earnings report as a publicly traded company. The recent surge in BLSH stock follows news that the firm has secured a New York BitLicense, a critical regulatory approval for operating institutional-grade crypto services in the state. This development positions Bullish to further expand its presence in the U.S. institutional market, where it has already gained significant traction. According to market data, Bullish’s U.S. market share has risen from 17% in March to 33% by early September, overtaking Coinbase in institutional trading activity during that period.

The exchange’s strategic focus on institutional clients has been central to its growth strategy. Bullish offers a range of services including spot trading, margin trading, and derivatives, with plans to roll out these products to U.S. customers in the coming years. Analysts from Bernstein anticipate that Bullish could become the second-largest institutional crypto exchange in the U.S. after Coinbase if it successfully launches its domestic services by the end of 2026. Bernstein projects that Bullish will capture 8% of U.S. spot trading volumes and 4% of the overall institutional market by 2027, supported by a forecast of 77% revenue growth, reaching $377 million by that year. These estimates suggest a potential market cap valuation of 34 times 2027 estimated EBITDA, which is a premium to current valuations of Coinbase and Robinhood.

The firm’s financial performance has shown mixed results. In its most recent quarterly report, Bullish reported digital asset sales of $80.2 million but a net loss of approximately $348.6 million, a sharp decline from the $80.4 million in sales and $104.8 million in profit reported in the same period of the previous year. Despite the losses, Bullish has bolstered its balance sheet with a $1 billion IPO in August, giving it a war chest of $3.5 billion in Bitcoin, Ethereum, and stablecoins to support its expansion and liquidity initiatives. The IPO was led by investment banks including JPMorgan Chase, Jefferies, and Citigroup, and the company now trades on the New York Stock Exchange under the ticker BLSH.

Investor confidence in the company appears to be growing, particularly among active hedge funds and institutional investors. Cathie Wood’s Ark Invest has made several strategic purchases of Bullish stock, accumulating over 160,000 shares at a cost of around $8.3 million. This follows earlier investments totaling $25.3 million in Bullish stock at the time of its IPO in August. The purchases were made through two of Ark Invest’s actively managed ETFs, the ARK Innovation ETF (ARKK) and the ARK Next Generation Internet ETF (ARKW), and brought its total holdings in Bullish to nearly $130 million as of the most recent filings.

Bullish has also been expanding its non-trading revenue streams. It owns CoinDesk, a leading cryptocurrency news and data platform, and offers a range of data, indices, and liquidity services to institutional clients. These services are expected to generate nearly $145 million in subscription revenue by 2027, accounting for 39% of the company’s total projected revenue. This diversification strategy is designed to reduce reliance on volatile trading revenue and position Bullish as a comprehensive player in the digital asset ecosystem.

The regulatory environment is expected to remain a key factor in Bullish’s future performance. The firm has obtained licenses in several jurisdictions, including New York, and is expected to launch its services in Germany and Hong Kong in the near future. Analysts note that Bullish’s compliance-first model aligns with the growing institutional interest in regulated platforms. As the U.S. crypto exchange market becomes more concentrated, with the top three exchanges now controlling nearly 90% of the market, Bullish’s ability to secure regulatory approvals and scale its institutional business will be critical to its long-term success.