Is COIN Stock A Buy As Stablecoin Bill Clears The Senate?

Coinbase Global (NASDAQ:COIN) stock surged by 16% in Wednesday’s trading and remains up by almost 20% over the past week. The rally comes following the passage of the much-anticipated stablecoin regulation bill through the Senate. Stablecoins are a sort of crypto designed to hold their value steady against fiat currency like the U.S. dollar. The legislation is a notable win for the crypto industry, as it provides a framework to regulate digital tokens that are pegged to the value of the U.S. dollar, with the bill’s requirements including full reserve backing for issuers, monthly audits, and anti-money laundering compliance. Such moves could help to increasingly legitimize cryptocurrencies and drive more mainstream adoption.

Coinbase benefits from this regulation in a couple of ways. Stablecoins are Coinbase’s second-largest revenue driver, after its core crypto trading business. Notably, Coinbase is also a cofounder of USD Coin (USDC), a popular stablecoin, and receives a 50% cut of the profits that USDC’s issuer Circle makes from the cash and bond reserves backing USDC, after expenses. On Wednesday, Coinbase launched Coinbase Payments, a new system that lets online merchants accept USDC. E-commerce solutions behemoth Shopify is an early partner, offering USDC payments with fiat payouts. By simplifying crypto payments, Coinbase is hoping to make USDC a standard online payment method for businesses, positioning it as a faster and cheaper alternative to credit cards.

Despite the positive developments over the past few days, Coinbase stock isn’t a definitive buy. Why is that? While the company has a very strong operating performance and financial condition, its valuation is very high, with the stock also being quite volatile. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

How Does Coinbase Global’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, COIN stock looks expensive compared to the broader market.

• Coinbase Global has a price-to-sales (P/S) ratio of 9.5 vs. a figure of 3.1 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 33.7 compared to 20.9 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 45.0 vs. the benchmark’s 26.9

How Have Coinbase Global’s Revenues Grown Over Recent Years?

Coinbase Global’s Revenues have grown considerably over recent years.

• Coinbase Global has seen its top line grow at an average rate of 18.6% over the last 3 years (vs. an increase of 5.5% for S&P 500)
• Its revenues have grown 75.2% from $4.0 Bil to $7.0 Bil in the last 12 months (vs. growth of 5.5% for S&P 500)
• Also, its quarterly revenues grew 24.2% to $2.0 Bil in the most recent quarter from $1.6 Bil a year ago (vs. 4.8% improvement for S&P 500)

How Profitable Is Coinbase Global?

Coinbase Global’s profit margins are much higher than most companies in the Trefis coverage universe.

• Coinbase Global’s Operating Income over the last four quarters was $2.3 Bil, which represents a high Operating Margin of 33.0%
• Coinbase Global’s Operating Cash Flow (OCF) over this period was $2.0 Bil, pointing to a high OCF Margin of 28.2% (vs. 14.9% for S&P 500)
• For the last four-quarter period, Coinbase Global’s Net Income was $1.5 Bil – indicating a high Net Income Margin of 21.1% (vs. 11.6% for S&P 500)

Does Coinbase Global Look Financially Stable?

Coinbase Global’s balance sheet looks very strong.

• Coinbase Global’s Debt figure was $4.3 Bil at the end of the most recent quarter, while its market capitalization is $75 Bil (as of 6/18/2025). This implies a strong Debt-to-Equity Ratio of 6.5% (vs. 19.4% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $10 Bil of the $22 Bil in Total Assets for Coinbase Global.  This yields a very strong Cash-to-Assets Ratio of 46.7%

How Resilient Is COIN Stock During A Downturn?

COIN stock has fared worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on COIN stock? Our dashboard: How Low Can Coinbase Global Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes.

Inflation Shock (2022)

• COIN stock fell 90.9% from a high of $357.39 on 9 November 2021 to $32.53 on 28 December 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is 343.62 on 8 December 2024, and it currently trades at around $295

Covid Pandemic (2020)

• COIN stock fell 35.5% from a high of $342.00 on 16 April 2021 to $220.61 on 19 July 2021, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 3 November 2021

Putting All The Pieces Together, Despite its strong growth, profitability, and financial stability, COIN’s weak downturn resilience and high valuation make it an attractive yet volatile and tricky stock to buy.

Not too happy about the volatile nature of COIN stock? The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics

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