Bank of America’s upgrade of Coinbase to a “Buy” is the kind of vote of confidence that gets traders talking: the firm set a $340 price target, implying roughly 40% upside from recent levels, and argued Coinbase is quietly building out far beyond spot crypto trading.
That’s not just lipstick on the same pig. BofA’s thesis centers on tangible product moves: 24/5 equities trading for S&P names, plans for equity perpetuals internationally, a new prediction-markets tab powered by a Kalshi tie-up, growing derivatives offerings (futures on copper and platinum go live later this month), and the looming possibility of a native token for Base, Coinbase’s Ethereum layer‑2. Add Coinbase Tokenize — a push to put private equity, real estate and other real‑world assets on chain — and you’ve got a company attempting to be a one‑stop financial app instead of a single‑product exchange.
What the upgrade actually signals
Analyst Craig Siegenthaler and his BofA team see Coinbase as an “everything exchange”: one app where users might trade crypto, equities and prediction markets; move money peer‑to‑peer; and access tokenized real‑world assets. That’s a different revenue profile from the old Coinbase: less dependent on spot crypto volatility and more on recurring flows, market‑making and new product fees.
It’s also a bet on execution. Coinbase has the regulatory brand and U.S. footprint many rivals lack, which helps when you’re offering equities and prediction markets that attract scrutiny. The firm’s recent product showcase sketched out a timeline for many of these initiatives — they’re not theoretical.
Why investors might like that story
- Diversification: Non‑crypto products could smooth revenue swings tied to bitcoin and ether prices. BofA explicitly says the long‑term upside hinges on Coinbase monetizing a broader platform.
- Engagement: New tabs and 24/5 trading increase daily utility for users, which can raise lifetime value and lower churn.
- Optionality: A Base token or significant institutional adoption of Tokenize could be big winners if regulators and markets cooperate.
Still, the path isn’t without potholes. Coinbase’s stock has pulled back about 40% from a July high, and short interest has risen. The business still has near‑term sensitivity to crypto price swings and regulatory risk in the U.S. — a reminder that transforming a company’s DNA takes time and capital.
Where prediction markets and AI fit in
Prediction markets are a notable gamble because they sit at the intersection of trading, technology and regulation. Coinbase’s Kalshi partnership puts it in a niche that’s already attracting broader attention from tech firms and platforms integrating predictive tools into finance products — an area heating up alongside AI‑driven market features. For example, larger platforms are experimenting with prediction tools and deeper, AI‑powered search and finance features that blur the lines between data, forecasting and execution; see recent moves to add prediction markets and deep financial search to mainstream finance tools Google Finance’s new prediction markets and Gemini-powered tools.
AI plays another supporting role: if Coinbase can leverage advanced search, personalization and risk‑screening, it increases product stickiness. That’s part of the broader race where big tech and finance firms are wiring AI into user experiences — Apple, for instance, is tapping customized Gemini models for Siri improvements — a sign of how AI is becoming an infrastructure layer across apps and finance products Apple’s use of a custom Gemini model.
The macro backdrop matters too
This call doesn’t exist in a vacuum. Tepid jobs data and talk of eventual Fed rate cuts have lifted risk assets and made borrowing cheaper — an environment that can favor retail brokerage volumes and speculative flows. Lower rates tend to nudge investors toward growth vehicles and leveraged products, which could indirectly benefit an exchange that offers both crypto and equities trading.
The risk checklist
A few red flags to watch before buying in: regulatory developments in the U.S. over tokens and listing rules; execution risk on new products (rollout hiccups, liquidity gaps, or thin interest in tokenized real‑world assets); and the company’s margins if it aggressively discounts fees to win market share in equities or derivatives.
Coinbase’s story is no longer just about bitcoin price charts. It’s about whether a crypto‑native company can graft mainstream finance products onto its stack without losing the regulatory trust or market liquidity that made it valuable in the first place. BofA is paying for that potential. The market will ultimately price Coinbase on execution, not intent.
If you’re considering a position, think about time horizon and tolerance for regulatory headlines. This is not a pure crypto play anymore — it’s a hybrid fintech experiment. That’s exciting, and risky, in equal measure.