Investment banking firm Benchmark rated Coinbase a buy, penciling in a price target of $252 while initiating coverage of the crypto exchange in a Wednesday note that highlighted how “game-changing” legislation has buoyed the crypto industry.

Coinbase was trading at $198, up more than 4%, early afternoon Wednesday, according to Yahoo Finance. Year-to-date, shares have slid 20%. 

Benchmark analysts believe that Coinbase is well positioned to benefit from a stablecoin bill that would provide a pathway to legality for stablecoin issuers across the U.S., including Circle, the firm managing USDC’s $60 billion market capitalization through a partnership with Coinbase.

“We believe most investors have yet to recognize or focus on the extent to which stablecoin and market structure legislation could cause significant expansions in COIN’s valuations,” they wrote, noting that the bills could broadly “reignite crypto market activity.”

If stablecoin legislation is enacted within the next 90 days, as some members of Congress have  hoped, the amount of income that Coinbase earns from assets backing USDC could soon increase if USDC’s market cap also rises, the analysts wrote.

Coinbase disclosed $910 million in full-year stablecoin revenue for 2024, up 31% from a year prior. The company has historically viewed stablecoins as a way to diversify its revenue away from trading fees and categorizes them with subscriptions and services revenue.

Wall Street titans like Bank of America have signaled that they will debut a stablecoin as soon as a framework is signed into law, leading to potentially thousands of new competitors.

Financial services firm Cantor Fitzgerald initiated coverage of Coinbase with a similar rating this month, giving the exchange an overweight rating while setting a $245 price target.

Benchmark’s note echoes Cantor’s analysts, who said that Coinbase is “one of the best ways to play stablecoin adoption” and that “the market is under-appreciating the opportunity that stablecoins have to meaningfully displace traditional cross-border payment rails.”

Based on estimates that the market value of all stablecoins could reach $2 trillion by 2035, Cantor wrote that Coinbase’s stablecoin revenue could see a “12x increase” from $910 million.

Although USDC has been lucrative for Coinbase, CEO Brian Armstrong isn’t satisfied. In February, he declared his company’s latest “stretch goal” was to dethrone Tether’s USDT, which towers over USDC with an industry-leading market capitalization of $145 billion.

Fostering “more partnerships” will be key to accelerating USDC’s market cap, Armstrong said, adding that the firm is adding “payments support” for the stablecoin across its product suite.

Edited by James Rubin