Coinbase Institutional Business Is An ‘Increasingly Important Contributor’ To Growth, Says Bullish Analyst

A meeting with Coinbase Global Inc (NASDAQ:COIN) Institutional co-CEO Brett Tejpaul highlighted the contribution of this segment, which is likely underappreciated by investors, according to BTIG.

• Coinbase Global shares are sliding. What’s behind COIN decline?

The Coinbase Global Analyst: Analyst Andrew Harte reaffirmed a Buy rating and price target of $240.

The Coinbase Global Thesis: "The institutional business is an increasingly important contributor to Coinbase’s growth," Harte said in the note.

Check out other analyst stock ratings.

He added that this division:

• Serves a wide range of asset managers, banks, retailers, ETF providers and exchange providers.
• Accounts for around 20% of total revenue.
• Is becoming far more robust than simply offering crypto trading capabilities.

The analyst noted that Tejpaul aims to develop the institutional business through three phases:

Phase 1 – Building a core institutional crypto platform.

Phase 2 – It is now a key focus and entails extending the infrastructure into payments and stablecoins.

Phase 3 – This is the longer-term vision of expanding the business into tokenized assets and continuous markets over time.

Crypto-As-A-Service: Harte further stated that Phase 2 of extending the institutional infrastructure into payments is gaining traction. "Coinbase now has more than 200 institutional clients who pay for access to its technology stack via the Coinbase Developer Platform," which is being called crypto-as-a-service, the analyst wrote.

These institutional clients differ from the traditional investment firms that Coinbase Global has served, Herte said. They include fintechs, global banks and payments platforms, he added.

The analyst further mentioned that Tejpaul highlighted the following:

• Five of the world’s Global Systemically Important Banks (GSIBs) have onboarded with Coinbase infrastructure.
• The institutional payments opportunity was opened by GENIUS, which triggered a surge in demand from corporations and enterprises seeking stablecoin payment capabilities.
• Nonbank payment providers are approaching a "strategic inflection point," and some believe blockchain adoption is important to remain competitive.
• Large U.S. corporations are revisiting crypto payments.
• The partnership with Amazon.com Inc (NASDAQ:AMZN) serves as "a significant proof point for Phase 2."
• Coinbase is positioning USDC, Base, and x402 as the full stack for agentic payments.

COIN Price Action: Shares of Coinbase Global had declined by 3.04% to $166.88 at the time of publication on Wednesday.

Photo: Shutterstock