Goldman Sachs Navigates Crypto Waters: Coinbase Upgraded, eToro Downgraded
In a significant move reflecting a nuanced outlook on the evolving digital asset landscape, Wall Street titan Goldman Sachs has announced key adjustments to its ratings for major crypto and brokerage firms. The bank has upgraded crypto exchange Coinbase (COIN) to a ‘Buy’ rating while simultaneously cutting social trading platform eToro (ETOR) to ‘Neutral’. This strategic recalibration underscores Goldman’s ‘selectively constructive’ stance on the sector, anticipating continued growth fueled by resilient retail trading and ongoing regulatory advancements through 2026.
A ‘Selectively Constructive’ Outlook for 2026
Goldman Sachs analysts, led by James Yaro, articulate a vision where the convergence of traditional retail brokerage and crypto trading will intensify competition, potentially reshaping market share dynamics and product pricing. The bank’s optimism for the coming years is rooted in the sustained engagement of retail investors and the steady progress in regulatory frameworks, which together are expected to underpin sector growth.
The Bull Case for Coinbase: Scale, Innovation, and Diversification
Coinbase (COIN) emerged as a clear favorite in Goldman’s latest assessment. The bank elevated its rating from ‘Neutral’ to ‘Buy’ and raised its price target to an impressive $303 from $294, suggesting a potential upside of over 30%. This positive outlook propelled COIN shares more than 4% higher in premarket trading.
Key drivers behind Coinbase’s upgrade include:
- Unrivaled Scale and Brand Strength:
Goldman highlights Coinbase’s robust market position as a primary catalyst for superior revenue growth and market share expansion compared to its peers.
- Efficient Customer Acquisition: Analysts project a 12% compound annual growth rate (CAGR) in revenue for Coinbase through 2027, significantly outpacing the 8% forecast for competitors, attributed to best-in-class customer acquisition costs.
- Strategic Product Launches: Recent innovations across brokerage, banking, wealth management, and tokenization are seen as enhancing Coinbase’s competitive edge and positioning it to capitalize on structurally growing areas like prediction markets.
- Expanding Subscription & Services Business: With this segment now accounting for approximately 40% of revenue, Goldman anticipates steady growth, which is expected to mitigate earnings volatility as crypto use cases broaden beyond mere trading.
eToro Faces Headwinds: Intensifying Competition Leads to Downgrade
In contrast to Coinbase’s ascent, eToro (ETOR) saw its rating downgraded from ‘Buy’ to ‘Neutral’, accompanied by a cut in its price objective from $48 to $39. The stock experienced a modest dip of 1.2% in premarket trading.
Goldman Sachs analysts cited intensifying competition across eToro’s core markets and products as a primary concern. This heightened rivalry is expected to drive up customer acquisition costs and potentially impact pricing strategies, posing challenges to eToro’s planned expansion in the U.S. While eToro continues to demonstrate healthy growth, the competitive landscape is becoming increasingly formidable.
Broader Market Implications and Other Key Ratings
Beyond Coinbase and eToro, Goldman Sachs maintained ‘Buy’ ratings on other prominent brokerage and technology firms, including Robinhood (HOOD), Interactive Brokers (IBKR), and Figure Technology (FIGR). This selective approach underscores the bank’s strategy of identifying companies best positioned to thrive amidst the ongoing evolution of financial markets and digital assets.
The latest ratings from Goldman Sachs offer a compelling snapshot of institutional sentiment towards the crypto and brokerage sectors, emphasizing the importance of scale, innovation, and diversified revenue streams in navigating a dynamic and competitive environment.
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