Upside potential reaches 40%! Deutsche Bank's initial rating on Coinbase is Buy, with a target price of $340

Deutsche Bank released its latest report on Wednesday, giving Coinbase (stock ticker: COIN) a “Buy” rating for the first time, with a target price of $340. Based on the current stock price, the potential upside is approximately 40%.

Deutsche Bank analyst Brian Bedell pointed out that as Coinbase actively promotes its “All-in-One Exchange” strategy, the platform’s positioning has evolved from merely a cryptocurrency exchange to a comprehensive trading platform covering multiple assets, on-chain finance, and derivative applications.

Deutsche Bank stated that Coinbase’s spectacular transformation is moving from slogans to actual practice. With new products being launched successively, the market size that Coinbase can reach will continue to expand, laying a foundation for growth in the coming years.

Earlier, Coinbase announced the launch of a series of heavyweight products, including US stock trading and prediction markets. Deutsche Bank believes these two major areas will generate substantial revenue contributions starting in 2026, helping the company gradually reduce its heavy reliance on “cryptocurrency spot trading fees,” making its revenue structure more diversified and stable.

3 Major Growth Tailwinds

1. Derivatives as a Key Driver

In Deutsche Bank’s view, derivatives business is the core of Coinbase’s medium- to long-term growth.

The report pointed out that Coinbase recently completed the acquisition of options exchange Deribit, and launched regulated perpetual contracts in the US, opening structural growth space for the company, especially among institutional investors.

Deutsche Bank expects that as market incentives normalize gradually, derivatives will continue to increase their share of Coinbase’s overall trading volume and revenue, becoming an important driver of valuation.

2. Stablecoins and Subscription Services Support “Recurring Revenue”

The second growth pillar comes from stablecoins and subscription-based services.

Deutsche Bank noted that the USDC balance on the Coinbase platform continues to rise; at the same time, the use cases for stablecoins in payments and on-chain activities are expanding, which will help increase recurring revenue and reduce dependence on volatile trading cycles.

3. Investment Peak Will Pass, Profit Flexibility Emerges

Although 2025 will still be Coinbase’s year of heavy reinvestment, Deutsche Bank believes that the company’s most intense expenditure phase is nearing its end.

Looking ahead to 2026, Deutsche Bank expects revenue growth to start surpassing expenditure growth, leading to a slight increase in profit margins. It is estimated that Coinbase’s adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) will grow by more than 20% annually next year.

Due to recent sideways movement in the cryptocurrency market, Coinbase’s stock price has also retreated, currently hovering around $245, near a 7-month low. Deutsche Bank frankly states that the current consolidation provides an excellent entry point, as the market has severely underestimated Coinbase’s long-term profitability potential after product line expansion.