Bank of America upgraded Coinbase (COIN) to a Buy rating, keeping a price target of $340. The bank tied the call to the growth outlook for Coinbase’s Layer‑2 network Base and broader tokenization opportunities, which it says could recompose the company’s revenue mix away from spot trading.
The move follows earlier institutional endorsements — including a Goldman Sachs upgrade with a $303 target — and reflects analysts’ view that Coinbase is evolving into an infrastructure and custody provider as much as an exchange. That strategic shift matters for traders because it alters where recurring revenue and margin expansion may come from.
Bank of America’s upgrade centers on Base, Coinbase’s Ethereum Layer‑2. Analysts argued Base improves scalability and lowers costs while inheriting Ethereum security, and they highlighted recent record DEX volumes and transaction activity on the network. Coinbase is reportedly pursuing technical upgrades to increase speed and decentralization, positioning Base to compete with established Layer‑1s and L2s.
Crucially, analysts flagged the possibility of a native Base token and large token incentive programs. A token issuance, they say, could generate billions of dollars in cash flow via incentive mechanisms if realized — a structural change that would shift valuation drivers from volatile trading fees toward ecosystem-sale and token-related revenue. For traders, that implies new event risk tied to token economics and emissions schedules.
Tokenization tailwinds and product diversification
Beyond Base, the upgrade leans on a projected tokenization wave in 2026. Bank of America pointed to growing stablecoin supply and demand from fintech firms, and to Coinbase Tokenize as a platform for asset managers to issue and custody tokenized real‑world assets (RWAs), tokenized stocks and prediction markets. Those services—custody, staking, settlement—are presented as more predictable revenue streams that reduce dependence on spot trading volumes.
Analysts acknowledge near‑term headwinds such as executive share sales and intense competitive pressure. Those factors could weigh on sentiment even if the structural thesis holds, creating windows of volatility that active managers can exploit or hedge against.
For traders and risk managers the practical takeaway is twofold: position sizing should account for event-driven moves tied to Base product launches and any token issuance, and hedging should consider persistent competition and insider flows that can amplify downside. Liquidity providers will watch funding, basis and options skew around major Base or tokenization announcements.
Looking ahead, investors are now focused on the unfolding tokenization cycle and any concrete plans for a Base native token; those developments will test whether Coinbase’s infrastructure push can translate into sustainable, less cyclical revenue and justify the higher price target.
