Deutsche Bank Initiates Coinbase with ‘Buy’ Rating, Forecasts 40% Upside to $340

Frankfurt, Germany – Deutsche Bank has launched its inaugural coverage of Coinbase (NASDAQ: COIN), assigning a compelling “Buy” rating and setting an ambitious price target of $340. This forecast suggests a significant upside potential of approximately 40% from the current stock price, signaling strong conviction in the crypto exchange’s future trajectory.

In a detailed report released on Wednesday, Deutsche Bank analyst Brian Bedell highlighted Coinbase’s strategic evolution. Bedell noted that Coinbase is rapidly transforming beyond its origins as a pure cryptocurrency exchange, actively pursuing a “universal exchange” strategy. This pivot aims to establish Coinbase as a comprehensive, one-stop trading platform encompassing diverse assets, on-chain finance, and sophisticated derivative applications.

Deutsche Bank emphasized that Coinbase’s strategic shift is moving from conceptualization to concrete execution. The continuous rollout of new products is expected to dramatically expand Coinbase’s total addressable market (TAM), laying a robust foundation for sustained growth in the years to come.

Recent product announcements, including the introduction of US stock trading and prediction markets, underscore this expansion. Deutsche Bank anticipates these new ventures will begin to make substantial contributions to revenue from 2026 onwards. This diversification is crucial for Coinbase, as it will progressively reduce its heavy reliance on cryptocurrency spot trading fees, fostering a more resilient and stable revenue structure.

Three Key Growth Catalysts for Coinbase

Deutsche Bank’s optimistic outlook is underpinned by three primary growth drivers:

1. Derivatives: The Core Engine of Mid-to-Long-Term Growth

The report identifies Coinbase’s derivatives business as central to its medium-to-long-term expansion. Recent strategic moves, such as the acquisition of options exchange Deribit and the launch of regulated perpetual futures in the U.S., are opening significant structural growth avenues. This is particularly relevant for attracting and serving institutional investors, a high-value segment.

As market incentives normalize and the derivatives landscape matures, Deutsche Bank projects a steady increase in the proportion of derivatives trading volume and revenue within Coinbase’s overall financial performance, serving as a critical driver for valuation uplift.

2. Stablecoins and Subscription Services: Bolstering Recurring Revenue

The second pillar of growth stems from the burgeoning stablecoin market and Coinbase’s expanding suite of subscription-based services. Deutsche Bank observed a consistent rise in USDC balances on the Coinbase platform, coupled with the increasing utility of stablecoins in payments and broader on-chain activities. This trend is expected to significantly boost recurring revenue, thereby mitigating the company’s exposure to the inherent volatility of cryptocurrency trading cycles.

3. Investment Peak Nears: Unlocking Profitability and Margin Expansion

While 2025 is anticipated to remain a year of substantial investment for Coinbase, Deutsche Bank believes the most intensive phase of capital expenditure is drawing to a close. Looking ahead to 2026, the bank forecasts that revenue growth will begin to outpace expenditure growth, leading to a modest but significant rebound in profit margins. Specifically, Deutsche Bank projects Coinbase’s adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to achieve a year-over-year growth rate exceeding 20% next year.

Despite the recent sideways movement in the broader cryptocurrency market, which has seen Coinbase’s stock price pull back to a 7-month low around $245, Deutsche Bank views this consolidation as an “excellent entry point.” The bank contends that the market is currently underestimating Coinbase’s long-term profitability potential, particularly given its aggressive product line expansion and strategic diversification efforts.