William Blair sees Coinbase and Circle positioned to benefit if cryptocurrency markets regain momentum, arguing that Wall Street’s earnings expectations for both companies are approaching a low point while regulatory rulemaking and tokenized-asset growth create new sources of activity beyond spot trading.
In a note led by Andrew W. Jeffrey, the firm said Coinbase shares had risen 31% since July 14, while Circle shares had gained 52% from Bitcoin’s July 1 low. The move has come despite weaker spot-market volumes, which prompted William Blair to reduce its 2026 EBITDA forecast for Coinbase by 11% to $810 million.
The analysts left their 2027 and 2028 Coinbase forecasts largely unchanged, suggesting the downgrade reflects near-term trading conditions rather than a reassessment of the company’s longer-term revenue model. Their argument rests on the expansion of derivatives, prediction markets, stablecoins and tokenized securities—businesses that could make earnings less dependent on retail spot-trading cycles.
Coinbase’s newer businesses take a larger role
Coinbase’s retail derivatives operation generated an estimated $200 million in annualized revenue during the first quarter, according to William Blair. Prediction markets, another recent addition to the platform’s product mix, reached an estimated $100 million in the second quarter.
Together, the two businesses represented roughly 6% of the firm’s estimated 2026 revenue, the analysts said. That remains a modest share of Coinbase’s overall business, but it gives the company revenue channels that can develop independently from conventional cryptocurrency buying and selling.
Spot volumes remain central to Coinbase’s performance, particularly in periods when Bitcoin and other large tokens trade in narrow ranges. Derivatives contracts and event-based prediction markets could bring in more recurring trading activity if they gain traction with users who are less interested in holding tokens outright.
William Blair also addressed Coinbase’s fee reductions for advanced traders, saying the changes appeared primarily targeted at markets such as the United Kingdom rather than its core US operations. The distinction matters for revenue because the US remains Coinbase’s most economically important market, while lower pricing abroad could be designed to improve competitiveness without materially resetting its domestic fee structure.
Coinbase has also been building out services for institutions, derivatives users and onchain participants, although William Blair’s note placed particular emphasis on products that could contribute meaningful revenue by 2027. The analysts’ forecasts imply that these newer divisions need to grow enough to offset periods when retail spot trading weakens.
Rulemaking replaces stalled legislation
The report linked the Senate’s failure to advance the Clarity Act to a more agency-driven approach to crypto policy. With legislation stalled, the Securities and Exchange Commission and Commodity Futures Trading Commission could fill remaining gaps through rulemaking and targeted exemptions.
William Blair pointed to a recent SEC exemption related to tokenized-equity trading as an example of how regulators may shape market structure without waiting for Congress. Tokenized equities are blockchain-based representations tied to shares or share-like instruments, a market that remains small compared with traditional securities trading but has attracted growing interest from financial firms and crypto platforms.
A regulatory route led by agencies may produce narrower rules than comprehensive legislation, and it can leave firms with less certainty about how standards will evolve. Yet exemptions and formal guidance could allow selected products to move forward, particularly where platforms seek to combine established financial assets with blockchain settlement or trading infrastructure.
The same policy backdrop is relevant to Circle, whose business is closely tied to USDC, the dollar-pegged stablecoin it issues. William Blair said Circle’s share performance in the near term could remain connected to both Bitcoin’s direction and changes in USDC’s market capitalization.
Circle’s outlook depends on USDC supply growth
William Blair said USDC’s supply could follow Bitcoin higher, potentially with a lag. A rising Bitcoin market often brings more trading activity and greater demand for dollar liquidity within crypto markets, which can increase the use of stablecoins for settlement, collateral and transfers.
For Circle, a larger USDC supply would generally expand the reserve base supporting the stablecoin. Circle earns revenue from those reserves, making supply growth a more direct operating measure than the price of Bitcoin itself. That relationship explains why the analysts tied further gains in Circle shares to USDC expansion rather than treating Bitcoin’s price as a standalone driver.
The firm said the lack of progress on the Clarity Act leaves the stablecoin regulatory framework largely unchanged for now. The SEC and CFTC may address aspects of the market through their own rules, but a comprehensive federal framework for stablecoin issuance and oversight would require legislative action.
Tokenized assets and crypto collateral add market activity
William Blair also cited the rising use of crypto as lending collateral and the growth of tokenized real-world assets as evidence of expanding onchain financial activity. The market capitalization of tokenized real-world assets increased to $39 billion from $26 billion at the end of 2025, according to the note.
That category includes blockchain-based versions of assets such as government debt instruments, money-market products, credit and other financial claims. Growth in tokenized assets could create additional demand for stablecoins, custody, settlement and trading infrastructure—the areas where Circle and Coinbase are trying to broaden their roles.
The analysts also referenced collateral activity on Hyperliquid, a decentralized derivatives platform, as another indication that crypto-native leverage and trading infrastructure are continuing to develop. Increased use of collateral can support trading volumes and liquidity, although it also raises risk when price moves force traders to close leveraged positions.
William Blair’s assessment places Coinbase and Circle on different sides of the same market recovery thesis. Coinbase would benefit from stronger trading activity and greater use of its expanding product suite, while Circle would benefit most if rising crypto activity translates into sustained growth in USDC circulation.
Explore how tokenized assets and equities could reshape crypto markets in 2026—read our guide on tokenized equities today.
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