Analysis of the Impact of Cryptocurrency Regulatory Policy Uncertainty on Coinbase (COIN)

Based on comprehensively collected data, I now present to you a systematic, in-depth analysis report.

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The Cryptocurrency Market Structure Act (Clarity Act), which is being advanced by the U.S. Senate Banking Committee, suffered a major setback this week. On January 14, 2026, Coinbase CEO Brian Armstrong publicly announced on social platform X that he was withdrawing support for the bill, forcing the postponement of the committee markup originally scheduled for January 15[1][2]. Armstrong clearly stated: “We would rather have no bill, than a bad bill.”

The core objectives of the bill are to clarify the regulatory authority boundaries between the SEC and CFTC, define when crypto assets should be classified as securities or commodities, and establish new information disclosure requirements. However, there are serious disagreements on key provisions:

:

Dispute Area	Coinbase’s Position	Industry Divide
Stablecoin Income Rules	Opposes restrictions	Banking lobby pushes for a ban; some crypto firms like Kraken support the bill
DeFi Regulatory Provisions	Strongly opposes	The government is granted unrestricted access to users’ financial records
Erosion of CFTC Authority	Opposes	The bill erodes CFTC’s regulatory authority, subordinating it to the SEC
Tokenized Stock Ban	Opposes	Effectively bans innovative financial products such as tokenized stocks

Based on the latest market data[0], Coinbase’s stock exhibits the following characteristics:

Indicator	Value	Interpretation
Current Price	$255.86
Market Cap	$65.47B	The second largest listed crypto exchange worldwide
52-Week Range	$142.58 - $444.65	Volatility exceeds 210%
P/E (TTM)	22.11x	Relatively reasonable valuation level
Beta Coefficient	3.71	3x higher volatility than the market[0]
Analyst Target Price	$375.00	Implies 46.6% upside potential

:

• YTD Performance: +8.17% (shows a rebound since the start of the year)
• 6-Month Performance: -35.06% (significant pullback)
• 3-Year Performance: +372.59% (notable long-term growth)

Based on Coinbase’s latest financial data[0][7], the company’s revenue structure exhibits the following characteristics:

:

Business Segment	Revenue Amount	Percentage	Regulatory Sensitivity
Banking Services (Retail)	$844M	46.8%	Medium
Subscriptions & Services - Stablecoin	$355M	19.7%	Very High
Subscriptions & Services - Blockchain Infrastructure	$185M	10.2%	Medium-High
Subscriptions & Services - Other	$143M	7.9%	Medium
Banking Services (Institutional)	$135M	7.5%	Low
Other Revenue	$81M	4.5%	Medium

: Stablecoin-related revenue ($355M, 19.7% of total) is directly exposed to regulatory policy risks. If the bill passes with restrictions on stablecoin income services, Coinbase will lose nearly one-fifth of its subscription revenue source.

Coinbase offers users bank deposit-like income services via its USDC stablecoin, which is one of its core differentiated competitive advantages. However, banking lobbying groups argue that this will cause deposits to flow out of traditional banks, threatening the stability of the U.S. financial system[2]. The compromise proposal in the Senate bill attempts to restrict crypto firms’ stablecoin income to “credit card-like” transaction activities, which is fundamentally conflicting with Coinbase’s business model.

Armstrong specifically emphasized that the bill will “effectively ban tokenized stocks”, which will restrict Coinbase’s ability to expand into emerging areas such as security tokenization and real estate tokenization. These innovative businesses could have been the company’s next growth engine.

The restrictive provisions on DeFi (Decentralized Finance) in the bill require the government to have unrestricted access to users’ financial records, which contradicts the privacy protection philosophy of the crypto industry. If Coinbase is forced to comply with these regulations, it may lead to user attrition to non-custodial decentralized exchanges.

Coinbase’s business model is highly dependent on regulatory certainty in the U.S. market. According to its 10-K annual report[7], the company’s main regulatory risks include:

1. Uncertainty in Security Classification
   : The SEC has launched multiple enforcement actions targeting crypto assets, and Coinbase itself remains a defendant in SEC litigation
2. Cross-Border Compliance Challenges
   : Although the company has obtained licenses in Germany, Singapore, the UK and other regions, regulatory uncertainty in the U.S. may impact its global expansion strategy
3. Litigation Risk Exposure
   : SEC litigation may result in substantial fines or business restrictions

Based on the results of DCF analysis[0], Coinbase’s intrinsic value is assessed as follows:

Scenario	Intrinsic Value	Deviation from Current Share Price
Conservative Scenario	$21.38	-91.6%
Base Case Scenario	$23.76	-90.7%
Optimistic Scenario	$26.60	-89.6%
Weighted Average	$23.91	-90.7%

:

• High WACC (28.5%)
  : Due to the high beta coefficient of 3.71, coupled with the inherent regulatory risks of the crypto industry, investors demand an extremely high return on equity
• Low Profit Margin Expectations
  : The DCF model assumes a historical average EBITDA margin of only 7.7%, while the current market may be overly optimistic
• Regulatory Premium Discount
  : Persistent regulatory uncertainty has led analysts to adopt highly conservative growth assumptions in the DCF model

There is an approximately 10-fold gap between the current share price of $255.86 and the DCF intrinsic value of $23.76, which reflects the following implicit assumptions in market pricing:

:

1. Regulatory Certainty Premium
   : The market expects a regulatory framework favorable to Coinbase to be finalized eventually
2. Growth Option Value
   : Coinbase’s first-mover advantages in areas such as ETF custody, stablecoins, and institutional services
3. Market Share Premium
   : As the leading U.S. compliant exchange, it enjoys brand and trust premiums

:

• If a favorable regulatory bill passes: Valuation may recover to the $150-$200 range
• If regulatory uncertainty persists or the bill is unfavorable: Valuation may revert to the DCF range
• Extreme scenario (full ban on stablecoin income): Share price may fall below $100

Rating	Number of Institutions	Percentage
Buy	19	54.3%
Hold	13	37.1%
Sell	3	8.6%

: $230 - $440

:

• January 12, 2026: Oppenheimer maintains “Outperform” rating
• January 8, 2026: BofA Securities upgrades to “Buy” rating
• January 8, 2026: Barclays maintains “Equal Weight” rating

Coinbase’s choice to publicly oppose the bill instead of compromising privately reflects its lobbying strength and strategic confidence in Washington. The company previously became the third largest fundraising source during the 2024 election cycle through its Political Action Committee (PAC), and Armstrong himself met with President-elect Trump to discuss policies[2]. This proactive strategy may force legislators to reconsider the bill’s provisions, ultimately reaching a compromise more favorable to Coinbase.

By firmly opposing the “pro-banking” version of the bill, Coinbase may build stronger brand loyalty among crypto-native users. In contrast, competitors supporting the bill (such as Kraken) may be viewed by the community as “betraying” crypto values. This positioning may translate into user growth and market share gains in the long term.

The regulatory vacuum period actually benefits mature players that have obtained compliance licenses. Coinbase’s investments in regulatory compliance (NYDFS BitLicense, multi-state MTL licenses) have formed a moat, giving it a legitimacy advantage over unregulated overseas competitors (such as some offshore exchanges).

The USDC stablecoin is jointly operated by Coinbase and Circle. If regulations restrict stablecoin income, Coinbase can shift to the following strategies:

• Expand USDC’s use cases in payments and cross-border remittances
• Develop USDC as the foundational liquidity layer for DeFi
• Explore deep integration of USDC with the traditional financial system (e.g., linking to money market funds)

If the bill fails to pass, the crypto industry will remain in a regulatory gray area. According to Coinbase’s annual report[7], this uncertainty may lead to:

• Extended wait-and-see attitude among institutional investors
• Restricted product innovation (reluctance to launch products that may be classified as securities)
• Continuous rise in compliance costs

Exchanges supporting the bill (such as Kraken) may gain a more stable development environment by accepting the regulatory framework. If these competitors gain an edge in compliance competition, Coinbase’s market share may be shaken.

Banking lobbying groups have a tough stance on the issue of stablecoin income. If Coinbase continues to confront the banking industry on this issue, it may face:

• Stricter regulatory scrutiny
• Exclusion from the traditional financial system (e.g., restricted bank account services)
• Escalated political pressure

Coinbase is currently still a defendant in SEC enforcement actions. Regulatory uncertainty may lead to prolonged litigation, resulting in sustained legal fees and reputation costs.

Regulatory Risk Impact Matrix (Scale 1-10)

                    │ Impact Level
                    │ Low   Medium High
        ────────────┼───────────────────
        Stablecoin Income Restrictions │        ████████░░ (8)
        Tighter DeFi Regulations   │        ███████░░░ (7)
        Escalated SEC Enforcement    │        ██████░░░░ (6)
        Ethical Clause Risks    │        █████░░░░░ (5)
        Market Structure Uncertainty │        ████████░░ (8)

Based on market data[6], the global crypto exchange landscape is as follows:

Exchange	24h Trading Volume (Nov 2025)	Characteristics
Binance	$16.9B	World’s largest, but under regulatory pressure
Coinbase	Not in top 10	Leading U.S. compliant exchange
Kraken	Top-ranked	Supports the bill, pursuing compliance
Robinhood	35+ tokens	Commission-free, user-friendly

:

• Strengths
  : Comprehensive compliance licenses, high brand trust, ETF custody status (9 Bitcoin ETF partners)
• Weaknesses
  : Relatively high fees (0.40%-0.60%), supports only 250+ tokens
• Threats
  : Regulatory arbitrage by offshore exchanges, entry of traditional financial institutions

Coinbase’s move to oppose the bill is reshaping industry alliances[1][3]:

Camp	Representative Enterprises	Position
Anti-Bill Camp	Coinbase, some DeFi projects	Opposes stablecoin income restrictions
Pro-Bill Camp	Kraken, Ripple	Supports bipartisan compromise bill
Wait-and-See Camp	Crypto.com, Gemini	Has not clearly stated position
Banking Industry	JPMorgan, Goldman Sachs	Supports strict restrictions on crypto income

This fragmentation may weaken the lobbying power of the crypto industry, creating opportunities for the banking industry and the SEC to secure more favorable regulatory provisions.

Regulatory uncertainty in the U.S. is creating a “crowding-out effect”:

• EU
  : MiCA regulations have been fully implemented, providing a clear regulatory framework
• Singapore
  : Has established a digital asset licensing system
• Hong Kong
  : Actively attracting crypto enterprises, issuing VASP licenses
• UAE
  : DMCC Free Zone has become a hot spot for crypto business

If U.S. legislation continues to be blocked, Coinbase may face pressure of talent and business migration overseas, which conflicts with the company’s mission to “build the crypto industry in the United States”.

Scenario	Probability Estimate	Target Price	Key Catalysts
Scenario 1: Favorable Regulation Passes	25%	$400+	Stablecoin income permitted, SEC litigation settled
Scenario 2: Bill Delayed/Neutral	40%	$250-$300	Regulatory uncertainty persists, revenue growth slows
Scenario 3: Unfavorable Regulation Passes	20%	$150-$200	Stablecoin income banned, DeFi restrictions imposed
Scenario 4: Extremely Unfavorable	15%	<$100	Full ban, stablecoins classified as securities

:

• Timeline for next actions of the Senate Banking Committee
• Changes to bill amendment content
• Progress of SEC litigation
• Policy signals from the Biden/Trump administration

:

• Quarter-over-quarter changes in stablecoin revenue
• Trend of institutional vs. retail revenue proportion
• Growth in ETF custody asset size
• Expansion speed of international revenue proportion

:

• Bitcoin price trend (highly correlated with COIN)
• Changes in market share (vs. Binance, Kraken)
• Trend of institutional capital inflow into the crypto market

Based on the above analysis, investors in Coinbase need to pay attention to the following core risks:

1. Regulatory Risk
   : Uncertainty in the U.S. crypto regulatory framework may lead to fundamental changes in the business model
2. Price Volatility Risk
   : A beta coefficient of 3.71 means market volatility will be amplified
3. Competitive Risk
   : Intensified competition among compliant exchanges may erode market share
4. Litigation Risk
   : Uncertainty in SEC enforcement actions
5. Technology Risk
   : Security incidents may result in substantial losses and reputational damage

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The uncertainty of cryptocurrency regulatory policy is a double-edged sword for Coinbase:

: Coinbase’s public opposition to the bill has delayed the legislative process, buying the company negotiation time, but it has also exacerbated regulatory uncertainty, which may pressure the share price.

: If Coinbase can leverage its influence in Washington to promote more favorable regulatory provisions, the company is expected to gain significant competitive advantages and valuation re-rating; if the bill passes in its current form, restrictions on stablecoin income will directly impact 19.7% of its revenue source.

: Regardless of the regulatory outcome, Coinbase’s strategic position as the leading U.S. compliant exchange is difficult to shake. Regulatory certainty (whether favorable or not) will eliminate the uncertainty premium in the current valuation, allowing the market to more clearly assess the company’s intrinsic value.

Investors should closely monitor legislative progress in Q1 2026 and Coinbase’s Q4 earnings report (scheduled to be released on February 12, 2026), as these events may serve as important catalysts for the share price.

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[1] Investing.com - “US Senate Banking delays crypto bill after Coinbase CEO opposition” (https://www.investing.com/news/stock-market-news/coinbase-cannot-support-crypto-bill-in-current-form-ceo-armstrong-says-4448538)

[2] Fortune - “Landmark crypto bill on knife’s edge as Coinbase CEO pulls support ahead of key Senate vote” (https://fortune.com/2026/01/14/crypto-bill-coinbase-legislation-clarity-market-structure-stablecoins-banking-markup/)

[3] CoinDesk - “Coinbase pulls support from crypto market structure bill” (https://www.coindesk.com/policy/2026/01/14/coinbase-pulls-support-from-crypto-market-structure-bill)

[4] Bloomberg - “Senate Committee Delays Crypto Market-Structure Markup” (https://www.bloomberg.com/news/articles/2026-01-15/senate-committee-delays-crypto-market-structure-markup)

[5] PYMNTS - “Coinbase CEO Pulls Support for Senate Crypto Bill Over Tokenized Equities Ban” (https://www.pymnts.com/cryptocurrency/2026/coinbase-ceo-pulls-support-for-senate-crypto-bill-over-tokenized-equities-ban/)

[6] Statista - “Biggest crypto spot exchanges 2025” (https://www.statista.com/statistics/864738/leading-cryptocurrency-exchanges-traders/)

[7] SEC.gov - Coinbase Global, Inc. Form 10-K (2024 Annual Report) (https://www.sec.gov/Archives/edgar/data/1679788/000167978825000022/coin-20241231.htm)

[8] CoinTelegraph - “Crypto industry split over CLARITY Act after Coinbase breaks ranks” (https://cointelegraph.com/news/crypto-industry-split-over-clarity-act)

[0] Jinling AI Market Data (Real-time Quotes, Financial Analysis, Technical Analysis)