According to a report by CoinDesk, British banking giant Barclays raised the ratings of cryptocurrency exchange Coinbase (COIN) and online brokerage Robinhood (HOOD) from "underweight" to "neutral" on the grounds that the two The company has a better business model. Barclays analyst Benjamin Budish believes both companies have "significantly matured," not least because of their product expansions and more positive financial outlooks.
Barclays’ report noted that Coinbase in particular could benefit from friendlier regulation, given both U.S. presidential candidates’ increasingly friendly stances on the digital asset industry and the approval of a multi-cryptocurrency spot exchange-traded fund (ETF). profit from the environment. The analyst wrote:
"While we still see risks to Coinbase, we believe the improving environment, bottom line, progressive and continued diversification, clear industry leadership in the U.S., and recent stock price performance point to a more balanced risk/reward, So we adjusted it to "neutral."
The report noted that despite the many challenges the crypto industry has experienced over the past two years, Coinbase continues to perform resiliently. Budish praised the company's ability to effectively keep costs low, especially those related to employees, despite growth in activity in 2024. He also mentioned the diversification of Coinbase’s revenue sources. Although the majority of revenue still relies mainly on transaction fees and interest income, the exchange has begun to see other areas of business become meaningful sources of contribution, including blockchain rewards. , escrow income and other transaction fees.
However, analysts warn that while many things appear to be moving in the right direction at Coinbase, there are still uncertainties in the space, including the broader macroeconomic environment and unclear regulations regarding whether several assets qualify as securities. , as well as the Securities and Exchange Commission’s (SEC) unresolved lawsuit against Coinbase.
The analyst also sees similar positive developments in Robinhood's business model, which could lead to future upside. Key factors for his positive stance include new products, Robinhood's expansion in the UK and Europe, and new potential customers from the Bitstamp acquisition.
"The factors that prompted our underweight rating are gradually improving and we now view the risk/reward ratio of both stocks as more balanced," Barclays said.
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