Coinbase shines on stablecoin boom, S&P 500 debut. Will the rally continue?

Coinbase Global, Inc. (NASDAQ: COIN) has emerged as the largest and most user-friendly cryptocurrency exchange in the US, since going public a few years ago. It has played a pivotal role in advancing institutional adoption of digital assets and popularizing mainstream crypto investing, thanks to the hassle-free interface and focus on regulatory compliance.

Coinbase shares have gained a whopping 36% in the past 30 days, outperforming the S&P 500 index by a wide margin. COIN has experienced significant fluctuations since the company’s stock market debut in early 2021, amid evolving investor sentiment and growing institutional acceptance of cryptocurrencies. After hitting a new high about a week ago, the stock has mostly traded sideways. It was the best-performing S&P 500 stock last month.

Diversification

The positive investor sentiment mainly reflects business diversification and the post-IPO surge of Circle Internet, Coinbase’s business associate in USDC. The uptrend is likely to continue as the company expands its operations beyond the core crypto exchange business to other areas like staking service, custodial service, and subscription service.

To a large extent, Coinbase’s growth is attributable to the continued momentum in USDC, the US dollar-backed stablecoin it co-founded with Circle. In May this year, Coinbase became the first crypto firm to join the S&P 500 index, replacing Discover Financial Services. Its inclusion in the benchmark index is widely viewed as a validation for the broader cryptocurrency industry. That came on the heels of the company reporting mixed results for the first quarter of 2025.  

Financials

The highlight of Coinbase’s Q1 report was a 24% year-over-year increase in revenues to $2.03 billion. Meanwhile, earnings decreased to $0.24 per share in the first quarter from $4.40 per share in the prior year period. The strong top-line performance was more than offset by a sharp increase in operating expenses. The numbers missed estimates. Adjusted EBITDA and adjusted net income were $930 million and $527 million, respectively.

Coinbase’s CEO Brian Armstrong said in the Q1 2025 earnings call, “We think cryptocurrency is the most important technology to update the financial system and create that economic freedom for people all over the world. Many people today don’t have access to good financial services and it’s holding back progress. Everyone deserves access to basic financial infrastructure, good, sound money, free from high inflation, the ability to get a loan, make payments without high fees and delays, and to choose what to do with their own money.”

Road Ahead

Of late, there has been a significant growth in stablecoin payments. By launching a USDC-based payments system, Coinbase has expanded its reach into global remittances and e-commerce. The management’s growth strategy is focused on strengthening the trading platform and expanding real-world crypto utility. A few weeks ago, it signed an agreement to acquire Sentillia, the parent of leading cryptocurrency derivatives exchange Deribit. More recently, the company purchased Liquifi, a token management platform focused on early-stage tokenization projects.

On Thursday, Coinbase shares opened at $350.22 and traded slightly lower in the early hours. The average price for the last 52 weeks is $233.30.