William Blair says the ongoing crypto pullback has created a favorable buying window for both Coinbase and Circle, arguing that the underlying cases for bitcoin and USDC remain firmly intact despite heightened market volatility.
In a report released Monday, the firm characterized Coinbase’s (COIN) recent decline as a momentary “air pocket” rather than a deterioration in fundamentals. The bank reaffirmed its outperform rating and encouraged investors to view the sell-off as an opportunity. Shares of Coinbase traded 2.6% higher early Monday at $246.53.
The same view applies to outperform-rated Circle (CRCL), which has dropped nearly 80% from its yearly high even as USDC’s market capitalization has remained steady. With both companies anchored to USDC, William Blair expects their stock performance to correlate — positioning Coinbase as the broader crypto access point and Circle as the more targeted play on USDC adoption, especially for cross-border B2B payments.
Analysts Andrew Jeffrey and Adib Choudhury said bitcoin’s recent weakness doesn’t undermine their long-term stance. They attributed the turbulence to structural factors such as concentrated ownership and the influx of new ETF participants, which can amplify price swings in an immature market. Over time, they expect regulatory clarity and deeper liquidity to help bitcoin settle into a more stable role within traditional portfolios.
In the near term, softer trading volumes could pressure Coinbase’s transaction revenue, but the firm continues to increase its U.S. spot market share and expand its global derivatives business. These initiatives diversify revenue streams and reduce reliance on trading activity. With about one-third of its costs tied to volume, Coinbase also has the flexibility to protect margins while advancing its strategic investments.
The report highlighted the strength of Coinbase’s Subscription & Services segment, now contributing roughly 40% of revenue. USDC’s steady $74 billion market cap supports that growth, and William Blair reiterated confidence in its $777 million fourth-quarter estimate. The bank also expects staking revenue to benefit from elevated yields and lower redemption activity during risk-off periods.
