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

William Blair analysts reaffirmed outperform ratings on Coinbase (COIN) and Circle (CRCL), arguing that earnings estimates are close to bottoming and that a broadening crypto market leaves both stocks positioned for a recovery even with spot trading volumes still depressed.

The team led by Andrew W. Jeffrey said Coinbase offers an attractive entry point after gaining 31% since July 14. They lowered their 2026 EBITDA estimate by 11% to $810 million but kept 2027 and 2028 projections broadly unchanged, suggesting the downward revisions may be largely done. Supporting factors cited include bitcoin's rally, the growing use of crypto as lending collateral and the expansion of tokenized real-world assets, whose market capitalization has climbed to $39 billion from $26 billion at the end of 2025.

The analysts also pointed to a wave of anticipated rulemaking after the Senate failed to advance the Clarity Act, including the Securities and Exchange Commission's recent tokenized-equity trading exemption, as a potential sentiment driver for Coinbase heading into 2027.

Diversification beyond spot trading

Newer business lines are becoming more material, the analysts said. Retail derivatives generated roughly $200 million in annualized revenue in the first quarter, while prediction markets reached $100 million in the second quarter. Together they account for about 6% of estimated 2026 revenue but are expanding quickly and offer income streams less tied to spot trading. The note acknowledged Coinbase's diversification push while dismissing the "Everything Exchange" label.

William Blair also pushed back on worries about Coinbase's pricing and competitive standing, saying recent fee cuts for advanced traders were aimed primarily at markets such as the U.K. rather than signalling weakness in the company's core U.S. business.

In a separate note on Circle, the analysts said bitcoin remains the key near-term driver of the stock, which is up 52% since bitcoin's July 1 low. They expect USDC's market capitalization to follow bitcoin higher, possibly with a lag, and see USDC growth as the likely catalyst for the next leg up in CRCL. A potential rival stablecoin poses little threat to USDC's position in their view, and Circle's longer-term value lies in building a global stablecoin payments and transaction network rather than relying on reserve income. With the Clarity Act stalled, stablecoin rewards are no longer directly threatened, the analysts said, while the SEC's tokenized-equity exemption and rising use of crypto collateral on Hyperliquid point to further market development.