Bank of America analysts upgraded Coinbase to a “Buy” rating from “Neutral,” pointing to the Crypto exchange’s growing role in tokenization and blockchain infrastructure.
The analysts kept their price target unchanged at $340 per share, but said the company’s outlook has strengthened following several recent product launches.
They highlighted Coinbase’s ability to broaden revenue streams through offerings such as stock trading and prediction markets, which could diversify the Business beyond traditional crypto trading.
Tokenization Seen As A Strategic Advantage
According to the analysts, Coinbase occupies a distinctive position as asset managers show increasing interest in issuing tokenized versions of securities like exchange-traded funds.
They emphasized that Coinbase’s advantage lies in non-consumer-facing infrastructure, which differentiates it from many competitors focused primarily on retail trading.
Last month, Coinbase introduced Coinbase Tokenize, a platform designed to provide asset managers with issuance, custody, compliance, and access to Coinbase’s large client base.
Given its institutional and retail reach, the analysts argued that Coinbase is well-positioned to “create markets and distribute products” at scale.
Beyond Stocks And ETFs
While Coinbase’s tokenization strategy has largely focused on stocks and ETFs, Bank of America analysts also identified real estate and private companies as potential growth areas.
They noted that tokenization could extend beyond public markets, offering new avenues for private assets to gain liquidity and broader investor access.
Separately, JPMorgan announced in November that its deposit token will launch on Base, Coinbase’s blockchain network, even though it does not directly use Coinbase’s institutional tokenization product.
Base Network Central To Long-Term Strategy
Coinbase launched Base, an Ethereum layer-2 scaling network, in 2023 and has increasingly positioned it as a core pillar of its infrastructure strategy.
The network already supports products such as Coinbase’s Bitcoin-backed lending offering and the Base app, expanding the company’s presence beyond exchange services.
The analysts suggested that a potential native token for Base could provide a significant financial upside for Coinbase if launched.
Potential Windfall From A Native Token
“If a native currency debuts for Base, then the exchange itself would likely benefit,” the analysts wrote, describing the move as a possible windfall.
They added that while the token would mainly incentivize builders, creators, and early adopters, Coinbase would likely retain a portion of the proceeds.
“While part of the native token launch will go towards incentivizing COIN’s partners, COIN will keep some of the cash proceeds for itself,” they said.
“This could raise billions of dollars in cash given its current $5 billion in total value locked.”
Regulatory Clarity Could Influence Timing
Coinbase has not confirmed plans to launch a Base token, though it said in September that the idea remains under consideration.
The company has not provided a timeline, and in 2023 it suggested that a token launch was unlikely at that time.
Bank of America analysts noted that progress on a U.S. crypto market structure bill could encourage Coinbase to revisit the idea as regulatory definitions become clearer.
Competitive Risks Remain
Coinbase shares were trading around $248, up about 1% on the day, though still roughly 40% below their July high of $444.
The analysts pointed to increasing “product velocity” as a positive trend, but warned that competition remains a key risk.
They highlighted Binance’s renewed U.S. banking access as a potential threat, noting that greater regulatory alignment could strengthen Binance.US through deeper global liquidity.