Coinbase, the cryptocurrency exchange, emerged as the top-performing stock in the S&P 500 during June. Its rise is fueled by positive regulatory developments, new product launches, and its inclusion in the benchmark index at the end of May.
Strong Momentum and Market Impact
Coinbase’s rally began after the market bottomed on April 8, following President Donald Trump’s tariff announcement that unsettled stocks. The company is now on track for its best month since November and its first three-month gain since late 2023, with a 43% increase in June alone. On Thursday, its stock hit its highest point since its 2021 IPO.
Oppenheimer analyst Owen Lau attributed the surge to Coinbase’s entry into the S&P 500, the Senate’s approval of the GENIUS Act, and the strong performance of Circle, a close partner of Coinbase.
Two major concerns that held Coinbase back—fee compression and regulatory uncertainty—are easing. Contrary to fears, fee compression has not materialized, and Coinbase has consistently generated positive earnings, which contributed to its S&P 500 inclusion.
The GENIUS Act establishes the first federal framework for dollar-pegged stablecoins, granting broad authority to the Treasury Department and opening opportunities for banks, fintechs, and retailers.
Devin Ryan of Citizens highlighted Coinbase’s close relationship with Circle Internet Group. Circle’s stock has surged more than 500% since debuting on the NYSE in early June. Under their revenue-sharing agreement, Coinbase earns 100% of revenues on all USDC stablecoins held on its platform and nearly half of other USDC revenues—accounting for 99% of Circle’s current income.
This positions Coinbase as an indirect way to benefit from Circle’s growth without bearing its operating costs, indicating potential for further stock appreciation.
Expanding Crypto Services and Strategic Partnerships
Beyond trading, Coinbase has expanded into custody, staking, wallets, and stablecoins. Recently, it enhanced its subscription plan by introducing a crypto-backed credit card with American Express and launched a stablecoin payments service in partnership with Shopify.
JPMorgan also collaborated with Coinbase to launch a “deposit token” stablecoin on Coinbase’s blockchain, Base.
Ryan noted that institutional investors are viewing crypto less as speculative and more as a utility sector, with legislative clarity—especially from acts like the GENIUS Act—as a key catalyst. Coinbase offers the most direct investment vehicle for this shift.
A potential risk lies in declining trading volumes on Coinbase’s platform since April, which could affect revenue. However, Oppenheimer’s Lau remains optimistic that further regulatory clarity—such as market structure legislation—could revive activity.
“If the GENIUS Act sparked ‘stablecoin summer,’ then the passage of the CLARITY Act could usher in ‘altcoin summer’,” Lau said. “By year-end, this could reignite enthusiasm for altcoins and trading.”
Author’s Opinion
Coinbase’s surge shows that the cryptocurrency market is evolving beyond speculation toward regulated, utility-driven growth. Its strategic partnerships and government frameworks like the GENIUS Act are critical to building investor confidence. While risks like volume drops exist, Coinbase’s unique position with Circle and expanding services suggest solid long-term potential.
Featured image credit: Roland Tanglao via Flickr
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