People watch as the logo for Coinbase, the biggest U.S. cryptocurrency exchange, is displayed on the Nasdaq MarketSite jumbotron at Times Square in New York on April 14, 2021.
Coinbase is the top performer in the S&P 500 in June, boosted by positive regulatory updates, product launches and, of course, its very inclusion in the benchmark stock index at the end of May.
The crypto exchange's outperformance in the S&P 500 extends back to the April 8 market low, just after President Donald Trump's initial sweeping tariffs announcement sent stocks sinking.
Coinbase is now on pace for its third straight monthly gain, 44% in June alone, and its first three-month rally since the end of 2023. On Thursday, the stock hit its highest level since the day of its initial public offering in 2021.
"The S&P 500 inclusion, the Senate's passage of the GENIUS Act and very strong performance of Circle negated the false narratives for Coinbase and people are waking up," Oppenheimer analyst Owen Lau told CNBC.
Restraints lifted
"The two things holding Coinbase back were the issues of fee compression — it hasn't happened and in fact, Coinbase has been generating positive earnings consistently, which is why they were included in the S&P 500 — and regulatory uncertainty," he said. "Many people don't believe there will be any consensus coming out of Congress … the fact is we're seeing the passage of the GENIUS Act."
The GENIUS Act establishes the first federal framework for dollar-pegged stablecoins, granting sweeping authority to the Department of Treasury and opening the door to banks, fintechs, and retailers.
Even with Coinbase's 44% run this month, the stock has room to appreciate further, according to Devin Ryan, head of financial technology research at Citizens JMP Securities. He said the market isn't fully connecting the dots around Coinbase's close relationship with Circle Internet Group. Circle debuted on the New York Stock Exchange June 5 and has soared more than 500% since.
According to a revenue share agreement, Coinbase keeps 100% of the revenue generated on all USDC held on Coinbase, plus nearly 50% of all other USDC revenues, "which is 99% of Circle's current revenue," Ryan said.
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