Coinbase: Bottom-Fishing in Crypto Stocks

Coinbase just shrugged off the worst 48 hours for crypto policy this year and ripped higher anyway.

The stock is down 57% from its 52-week high and has sat out the AI-driven rally that’s pushed the Nasdaq to record territory. But when the Senate killed the industry’s market-structure bill and the Fed hiked rates in the same week, Coinbase barely dipped, then jumped over 5% on Thursday after the SEC handed the industry a real win: a green light for tokenized stock trading.

Latest Market Moves

• ·      Bitcoin trades near $77,500 in early Friday trade, clawing back most of Tuesday’s drop to around $75,000 after the Senate’s Clarity Act vote failed.

• The Nasdaq Composite jumped 1.69% and the S&P 500 rose 1.14% on Thursday, with tech leading gains as investors read Wednesday’s Fed hike as clearing the path rather than restricting it.

• Gold is up 0.7% at $4,431.60 an ounce in early Friday trade, still well off the year’s high near $5,627.

• The US 10-year Treasury yield eased back from its highest level since 2007 after Wednesday’s Fed decision, taking some of the pressure off risk assets.

Left Out of the AI Trade

Coinbase’s chart looks nothing like the rest of big tech’s.

The Nasdaq and S&P 500 are near record highs this year on the back of AI infrastructure spending, but Coinbase has no exposure to that story. Its revenue comes almost entirely from crypto trading volumes and customer balances, both of which shrank through the first half of the year. That’s left the stock trading off crypto sentiment and regulatory headlines while the rest of the market grinds higher.

The Business Cooled Too

It isn’t only sentiment weighing on the shares.

Second-quarter revenue fell short of consensus at $1.22 billion as total crypto spot trading volume dropped 25% quarter over quarter. Consumer and institutional transaction revenue both declined year over year, down 20% and 26% respectively, while assets on the platform slid from $294 billion to $246 billion.

The one offsetting trend: non-trading revenue, spanning stablecoins, subscriptions and Coinbase’s own Base blockchain, now makes up roughly half the total and is growing even as trading volumes shrink.

Two Blows in 48 Hours

Crypto took two direct hits in 48 hours this week and barely flinched.

The Senate’s Clarity Act, the industry’s push for a formal market-structure law, failed a cloture vote 49-50 on Tuesday, five votes short of the sixty needed to advance. The Fed followed on Wednesday with a 25-basis-point hike to a 3.75%-4% range, its first increase since 2023, with Chair Kevin Warsh saying inflation “is too high and has been for too long.” Bitcoin fell to around $75,000 on the news but has since recovered most of that ground.

Tokenized Stocks Just Got the Green Light

The real trigger for Thursday’s rally didn’t come from crypto policy at all.

The SEC granted a five-year “Innovation Exemption” letting blockchain venues trade tokenized US stocks in a permissioned environment, capping large-cap names at 0.25% of average daily volume and smaller stocks at 2.5%, with no leverage allowed. Chair Paul Atkins said the framework is designed to “resolve challenges that have prevented responsible innovation from taking root” while the SEC weighs permanent rules. Coinbase jumped 3.7% within minutes of the news, with stablecoin issuer Circle up a similar amount.

Coinbase already has tokenized shares of Apple, Nvidia, Meta and other names trading on its own Base blockchain, launched in August but restricted to non-US persons because no domestic framework existed yet. Thursday’s exemption is the first step toward bringing that product to US markets directly.

The Chart: A Range Ready to Break

Coinbase’s daily chart has been going nowhere for months, and that’s the point.

The stock has churned in a roughly $150-$220 range since February, repeatedly testing support near its 52-week low of $139.11 without breaking it. Thursday’s close near $174 leaves it in the middle of that band, comfortably clear of the floor.

The 14-day RSI tells a more encouraging story than the price chart alone. It’s been printing higher lows since February even as the stock chopped sideways, a bullish momentum divergence that often precedes a break higher.

Source: SpreadEx | COIN, Daily Chart