BofA Lifts Coinbase Target on Stablecoin Revenue Outlook Bank of America has raised its price target for Coinbase ($COIN) to $203 from $174 while reaffirming a Buy rating on the stock. The ba
Bank of America has raised its price target for Coinbase ($COIN) to $203 from $174 while reaffirming a Buy rating on the stock. The bank raised its price target and reaffirmed its buy rating, while also lowering its near-term performance expectations as cryptocurrency trading volumes weakened.
The bank expects that after the Federal Reserve's interest rate hike in September, stablecoin revenue will further increase, and has raised its earnings-per-share forecast for Coinbase for 2027 and 2028. The move signals growing confidence in Coinbase's ability to generate more predictable, interest-linked income that is less dependent on volatile trading activity.
Central to that thesis is Coinbase's exposure to $USDC reserve income. Coinbase receives half of Circle's residual revenue generated from reserves backing its USDC stablecoin, according to details disclosed in Circle's IPO filing submitted to the Securities and Exchange Commission.The interest earned on those reserves fluctuates when the Federal Reserve adjusts its target rates, making a rate hike a direct tailwind for Coinbase's stablecoin revenue line.
Despite Bitcoin ($BTC) and Ethereum ($ETH) rising 43% and 70% respectively in the third quarter, weakened cryptocurrency trading volumes led Bank of America to lower its near-term performance expectations for Coinbase. The divergence highlights a recurring tension for the exchange: asset price appreciation draws headlines, but it does not always translate into secondary trading activity or fee revenue.
Still, the longer-term picture appears more constructive. Unlike trading fees, which fluctuate sharply with crypto prices, stablecoin income is tied to interest earned on reserves backing USDC, making it a far more predictable and higher-margin business. Bank of America's raised earnings estimates for 2027 and 2028 suggest the bank views this revenue stream as increasingly material to Coinbase's financial profile over the medium term.
Coinbase shares trade on the Nasdaq under the ticker $COIN.
Sources:TokenPost: Bank of America Raises Coinbase Price Target to $203 From $174Decrypt: Coinbase Takes 50% Share of Circle's Residual USDC Reserve Revenue
