Rothschild & Co Redburn Upgrades Coinbase Global to Buy Amid Diversification and Crypto Adoption Trends

Market Analysts Reassess Cryptocurrency Leaders

Rothschild & Co Redburn has upgraded Coinbase Global Inc. (COIN) from a 'Neutral' to a 'Buy' rating, setting a new price target of $417.00. This adjustment signals a notable shift in analyst perspective regarding the cryptocurrency exchange's future trajectory. Concurrently, the firm initiated coverage of Circle Internet Group (CRCL) with a 'Neutral' rating and a $136 price target, establishing a baseline valuation for the stablecoin issuer.

Coinbase's Strategic Pivot and Enhanced Market Position

The upgrade for Coinbase comes as the crypto exchange, currently trading around $372.07 with a market capitalization of $95.6 billion, has demonstrated significant strategic evolution. A primary driver behind Rothschild & Co Redburn's revised outlook is Coinbase's successful diversification of its revenue streams. The company has notably reduced its reliance on retail trading fees, which constituted approximately 90% of its revenue between 2019-2021, to a projected 50% by 2025, according to consensus forecasts. This shift is bolstered by robust growth in institutional trading revenue and expanded derivatives capabilities.

Key to this diversification is the acquisition of Deribit, a Dubai-based crypto derivatives platform, for $2.9 billion. Completed on August 14, 2025, the deal, involving $700 million in cash and the remainder in Class A stock, positions Coinbase as a global leader in crypto derivatives. Deribit, which reported over $1.2 trillion in trading volume in 2024 and approximately $60 billion in current platform open interest, is expected to be immediately Adjusted EBITDA accretive for Coinbase. This strategic move expands Coinbase's offerings to include spot, futures, perpetuals, and options trading services, enhancing its appeal to institutional and professional investors.

Furthermore, Coinbase's Subscriptions and Services revenue has grown at an estimated 53% Compound Annual Growth Rate (CAGR) from 2021 to 2025, with stablecoin revenue being a significant contributor. Rothschild & Co Redburn forecasts that growth in USDC market capitalization will more than compensate for potential headwinds from lower U.S. policy rates.

Broader Market Context and Implications

Coinbase has shown remarkable momentum, delivering a 128% return over the past year. Its strong financial health, indicated by a current ratio of 2.13, provides ample liquidity for its expansion plans. The company's strategic partnership with Samsung, integrating its services into 75 million Galaxy devices in the U.S., aims to normalize digital asset usage for a mass-market audience. As a critical infrastructure provider, Coinbase also acts as a custodian for 9 out of 11 spot Bitcoin ETFs and 8 out of 9 Ethereum ETFs, solidifying its integral role in the evolving digital asset ecosystem.

The broader market implications include an improving perception of crypto enablers on Wall Street, accelerated institutional adoption, and increasing integration of digital assets into traditional finance. The overall crypto market is showing signs of maturation, with Bitcoin nearing its all-time high, supported by increasing regulatory clarity.

For Circle Internet Group, the initiation of coverage highlights its significant market presence as the second-largest stablecoin issuer globally, primarily through USDC, with a market capitalization of approximately $73 billion. Circle generates most of its revenue from interest income on reserves backing its stablecoins. While currently facing profitability challenges, Circle maintains a "GOOD" financial health score and operates with moderate debt levels. Rothschild & Co Redburn notes the substantial potential addressable market for stablecoins, theoretically spanning the entirety of global value transfer and money supply, despite current volumes representing only a fraction of the U.S. M2 money supply.

Looking Ahead

The upgrade for Coinbase underscores a pivotal moment for the company as it successfully transforms into a diversified financial infrastructure provider within the digital asset space. Investors will be closely watching for continued execution on its diversification strategy, particularly the integration synergies from the Deribit acquisition and growth in its Subscriptions and Services segment. For Circle, future developments will hinge on sustained USDC adoption, the success of its Circle Payment Network, and its ability to manage distribution costs while expanding its product offerings. The analyst actions reflect a growing institutional confidence in the maturation and long-term potential of the digital assets sector, albeit with an acknowledgment of ongoing volatility and evolving market dynamics.