Coinbase Global Inc. (NASDAQ:COIN) shares are trading higher Monday after Senate Republicans released a revised draft of the CLARITY Act ahead of Tuesday’s procedural vote, boosting odds the crypto market-structure bill advances.
- Coinbase Global stock is among today’s top performers. What’s driving COIN stock higher?
Revised CLARITY Act Draft Lifts Odds of Senate Passage
Tuesday afternoon brings a critical test for the CLARITY Act, with lawmakers needing 60 votes at 2:15 p.m. ET just to clear the procedural hurdle that would let the crypto market-structure bill move into formal debate and amendments.
Former Democratic Rep. Tim Ryan, who co-chairs the Blockchain Innovation Project and sits on Coinbase’s Global Advisory Council, told Benzinga “I think we can get there,” citing two Democratic senators who crossed party lines to help the bill clear committee back in May as a sign others might follow.
Ryan said resistance to the bill also comes from entrenched financial interests wary of new competition, pointing to lobbying from both banks and crypto groups over how stablecoin rewards could pull deposits from community lenders, an issue directly relevant to Coinbase given its central role in that debate and the roughly $20 billion in average USDC held on its platform last quarter, over 30% of all USDC in circulation.
Not everyone in the Democratic caucus is on board, though. Senate Democrats issued a joint statement arguing the current text still doesn’t go far enough on ethics safeguards, consumer protections, illicit finance rules and conflict-of-interest provisions.
Compass Point Upgrades Coinbase, Citing Bitcoin Recovery
Adding to the bullish backdrop, Compass Point analyst Ed Engel upgraded Coinbase to Neutral from Sell and raised the price target to $177 from $130.
Engel pointed to growing signs that Bitcoin (CRYPTO: BTC) has turned the corner off a cyclical low point, noting the current cycle is unfolding in line with the roughly four-year pattern the asset has followed in the past. He cited the record $3 billion wipeout of short positions on Aug. 19, the largest such liquidation bitcoin has ever seen, along with bitcoin’s climb past the $67,000 level that marks the average cost basis for short-term holders, a move that’s pushed 65% of those holders into profitable territory.
Engel said he continues to view rising competition as a lasting drag on what Coinbase can charge and how much it can keep as profit, yet found it tough to stay bearish on the company’s earnings trajectory given his belief that retail trading activity, a metric that tends to trail behind price action in crypto cycles, should pick back up if the broader market keeps rallying. That view underpins his new $177 target, which he calculated by applying 28 times multiple to his estimate of the company’s earnings at the midpoint of its cycle.
COIN Shares Are Surging
COIN Price Action: Coinbase shares were up 9.24% at $191.46 at the time of publication on Monday, according to Benzinga Pro.
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