William Blair says the latest crypto market downturn has created a compelling entry point for investors, arguing that neither bitcoin’s volatility nor the recent sell-off undermines the core investment theses for Coinbase or Circle.
In a Monday report, the firm described Coinbase’s (COIN) pullback as a temporary “air pocket,” not a signal of deteriorating fundamentals. William Blair reiterated its outperform rating and encouraged investors to use the dip as a buying opportunity. Coinbase shares were up 2.6% in early trading at $246.53.
Circle (CRCL) received similar treatment. Despite the stock sliding nearly 80% from its 52-week peak, USDC’s market cap has remained stable. The bank emphasized that both companies are deeply tied to USDC, predicting their stocks will continue to trade in parallel — with Coinbase serving as the all-purpose crypto entry point and Circle offering more direct exposure to USDC’s expansion in international B2B payments.
Analysts Andrew Jeffrey and Adib Choudhury said bitcoin’s pullback doesn’t weaken their long-term outlook. Instead, they pointed to an immature market structure, where concentrated holdings and an influx of first-time ETF participants can magnify short-term volatility. As liquidity improves and regulatory clarity advances, they expect bitcoin to evolve into a more stable and widely held asset.
While the recent decline may temporarily dampen Coinbase’s trading revenue, William Blair noted that the company continues to grow its share of U.S. spot markets and expand its global derivatives operations — both of which help diversify revenue and soften volume-driven swings. With roughly a third of operating costs variable, the firm also has room to protect margins while continuing to invest.
Coinbase’s Subscription and Services business, now accounting for about 40% of revenue, remains a bright spot. The report highlighted the resilience of USDC’s roughly $74 billion market cap and reaffirmed expectations for $777 million in Q4 S&S revenue, driven by USDC rewards and a pickup in staking revenue due to higher yields and reduced redemptions during market downturns.
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