Coinbase, Circle shares positioned for crypto recovery as estimates stabilize: William Blair

William Blair analysts said Coinbase shares (COIN) offer an attractive entry point for investors after gaining 31% since July 14, despite depressed spot trading volumes.

They expect a flurry of regulatory rulemaking following the Senate's failure to advance the Clarity Act — including the Securities and Exchange Commission's recent tokenized-equity trading exemption — to improve sentiment and potentially support Coinbase heading into 2027.

Analysts, led by Andrew W. Jeffrey, cut their 2026 EBITDA estimate by 11% to $810 million but left 2027 and 2028 roughly unchanged, arguing estimates may be nearing a trough. They expect crypto market activity to keep recovering, citing bitcoin's rally, growing use of crypto as lending collateral and the expansion of tokenized real-world assets, whose market cap has risen to $39 billion from $26 billion at the end of 2025.

Coinbase’s newer businesses are also becoming increasingly important.

"Everything Exchange (we hate that term) signals diversification," the analysts wrote in a note to clients. "Call it what you will, Coinbase has diversified its offerings significantly this year, notably adding institutional and retail derivatives and prediction markets."

Retail derivatives generated about $200 million in annualized revenue in the first quarter, while prediction markets reached $100 million in the second quarter, together accounting for roughly 6% of estimated 2026 revenue but growing quickly and offering revenue streams less correlated with spot trading.

The analysts also argue that concerns over Coinbase’s pricing and competitive position are overstated, noting its recent advanced-trader fee cuts were primarily aimed at markets such as the U.K. rather than signaling weakness in its core U.S. business.

Circle: USDC growth seen driving next leg

Bitcoin also remains the key near-term driver of Circle's (CRCL) valuation, William Blair analysts said in a separate note, with CRCL shares up 52% since bitcoin's July 1 low. The analysts expect USDC's market cap to follow bitcoin higher, potentially with a lag, and say the next leg higher in CRCL will likely be driven by USDC growth.

The analysts argue that a potential rival stablecoin poses little threat to USDC's position, maintaining that Circle’s longer-term value lies in building a global stablecoin payments and transaction network rather than relying on reserve income.

The Senate’s failure to advance the Clarity Act leaves the stablecoin regulatory status quo largely intact, with the SEC and CFTC likely to fill remaining gaps through rulemaking. Stablecoin rewards are no longer directly threatened by the stalled legislation, the analysts said, while the SEC’s tokenized-equity exemption and growing use of crypto collateral on Hyperliquid provide additional signs of market development.

William Blair reiterated "outperform" ratings on both COIN and CRCL shares.