Coinbase, the largest compliant crypto trading platform in the United States, has officially opened stock and ETF trading to all U.S. users. This means that a platform with 110 million verified users is now challenging Robinhood, Charles Schwab, and traditional brokerages by offering 24-hour trading (five days a week), zero commissions, and fractional share support. The day after the announcement, Coinbase shares gapped higher and closed at $184.91, up 13.5% on the day. The explosive rally sharply contrasted with the stock’s weakness following its mid-February earnings report, which had disappointed investors.

The Logic Behind the Surge

The rally can be broken down into two key drivers: rapidly repriced new business potential and favorable macro tailwinds.

The most direct catalyst was Coinbase’s February 24 announcement of the full rollout of stock trading. The company opened commission-free trading for more than 8,000 U.S. stocks and ETFs to all American customers, with a minimum trade size of just $1 and funding available via U.S. dollars or the USDC stablecoin. The move was widely interpreted as a strategic shift from being “a crypto exchange” to becoming “an exchange for everything.”

CEO Brian Armstrong stated on social media, “This is another step toward our vision of tokenized stocks.” Coinbase is attempting to build a bridge where users can manage both traditional and crypto assets within a single account. If integrated with smart contracts and future tokenized securities, this one-stop model could unlock revenue streams far beyond trading fees.

Macro conditions also provided support. On the same day, Bitcoin surged more than 7%, approaching the $70,000 level. For Coinbase, Bitcoin price movements and trading volumes are core revenue drivers. Higher prices typically mean increased trading activity and higher fee income. Bitcoin’s breakout boosted risk appetite across the crypto ecosystem, and as the sector leader, Coinbase benefited directly.

From a revenue structure standpoint, launching stock trading diversifies Coinbase’s income streams. In recent years, the company has been heavily reliant on retail crypto trading fees, making revenue highly cyclical. While the brokerage business faces stiff competition from Robinhood and SoFi, it opens the door to a market significantly larger than crypto alone. Bloomberg Intelligence suggests that expanding payment use cases could multiply USDC-related revenue, creating a high-margin hedge against trading fee volatility.

On a deeper level, investors are pricing in ecosystem synergy. Stock trading alone may not immediately generate outsized profits, but it increases user engagement, asset retention, and diversification. As noted by Investopedia, Coinbase recently introduced an AI agent wallet allowing autonomous management and trading of crypto assets. While not yet extended to equities, the technological foundation could eventually enable AI-driven cross-asset portfolio management. The potential integration of traditional securities with crypto and AI technology is the type of narrative Wall Street is willing to assign premium valuations to.

Outlook for the Stock

Despite the surge, analyst consensus remains “Hold,” with an average price target of around $278, implying upside but reflecting wide dispersion. Targets range from a bearish $120 to a bullish $510, underscoring the stock’s inherent volatility. Firms such as Monness maintain a Sell rating, citing concerns about stablecoin prospects and soft trading volumes.

From a short-term technical perspective, the rally shows some warning signs. Although the closing price of $184.91 has moved above the 20-day moving average, it remains well below the 50-day average near $213 and the 200-day average around $288, indicating that the broader downtrend has not yet reversed. Momentum indicators such as the relative strength index have entered overbought territory, suggesting the possibility of short-term consolidation or pullback. A key resistance level lies near $191; a decisive breakout would be needed to extend gains.

Over the medium term, the stock’s trajectory hinges on three variables. First, whether Bitcoin’s bull run continues. Coinbase’s profitability remains closely tied to crypto market activity. Its mid-February earnings miss was driven by a more than 20% year-on-year revenue decline due to weaker trading volumes. If Bitcoin sustains its breakout and initiates a new rally cycle, earnings expectations could improve significantly.

Second, the execution of the stock trading business. Competing against established zero-commission platforms, Coinbase must effectively convert its 110 million users into equity traders to validate its “one-stop exchange” strategy.

Third, regulatory developments. The proposed CLARITY Act in the U.S. Congress aims to establish clearer regulatory frameworks for cryptocurrencies. Markets estimate roughly a 69% probability of passage before April. Regulatory clarity would significantly reduce Coinbase’s operational risk profile.

In short, Coinbase’s transformation story has reignited investor enthusiasm. Whether this marks a structural rerating or a short-term spike depends on crypto momentum, strategic execution, and the regulatory landscape ahead.