Coinbase Global (COIN) stock jumped almost 8% to near $188.50 on Monday, outperforming broader market declines, after an analyst upgrade came on the heels of a Wall Street warning about potential market weakness.
Compass Point analyst Ed Engel upgraded Coinbase from sell to neutral with a price target of $177, citing improving crypto-cycle trends and EBITDA performance, though acknowledging ongoing margin pressure from competition and secular pricing concerns.
Engel's upgrade appears tied to expectations around the Digital Asset Market Clarity Act, which the Senate was scheduled to vote on this week. The legislation would determine which regulatory body oversees cryptocurrency markets—a critical issue for Coinbase's ability to list tokens without legal delays.
The analyst expects the bill to fail. Despite this bearish assessment, investors bought the stock, betting on potential regulatory clarity should the measure pass. The bill had already been delayed once and this represented the final vote before November elections.
The move came after Morgan Stanley's chief US equity strategist Mike Wilson warned clients on Sunday that the stock market could decline within 30 days if oil prices reached $120 to $140 per barrel, citing liquidity concerns.
Coinbase's gain contrasted with broader market weakness, as the S&P 500 fell 0.8% during the same period. Meanwhile, analyst estimates for Coinbase range from $95 to $330 across 28 analysts covering the stock, with Morgan Stanley's September coverage initiating at $250.
