William Blair Says Coinbase, Circle to Benefit From Crypto Market Recovery

William Blair said Coinbase and Circle stand to benefit from a recovery in the cryptocurrency market, citing changes in the regulatory environment, increased activity in tokenized assets and business diversification.

The Block reported on September 22 that investor sentiment improved after the U.S. Securities and Exchange Commission rolled out regulations related to areas including tokenized stock trading following the U.S. Senate’s failure to pass the Clarity Act, according to William Blair. The bank said that should provide a tailwind for Coinbase through next year.

William Blair said Coinbase expanded its product offerings this year to include derivatives for institutional and retail clients, as well as prediction markets, and argued that market concerns about the company’s competitiveness were overstated. For Circle, the bank said Bitcoin’s rise has been the main near-term driver of gains in the company’s valuation. Circle shares have climbed 52% since July 1, when Bitcoin hit a recent low.

William Blair said the market capitalization of Circle’s U.S. dollar stablecoin USDC is likely to track Bitcoin’s gains with a lag. The bank said rival stablecoins are unlikely to pose a major threat to USDC’s position and that Circle’s long-term value lies in building a global stablecoin payments and trading network rather than relying on reserve income alone.