Coinbase Stock Seen De-risked USDC Growth Improves Circle outlook

TLDR

• Coinbase shares fell about 26% from March highs before analysts reset expectations.
• William Blair said weak trading trends are already reflected in Coinbase shares.
• USDC now holds about 27% of the stablecoin market, up from 21% in 2024.
• Analysts said Coinbase gains from USDC growth and broader product expansion.
• William Blair called a long crypto slump a low-probability outcome for Coinbase.

Coinbase shares look less exposed after a sharp selloff, according to William Blair. The firm said USDC growth is also improving the outlook for Circle. That view comes as Coinbase stock remains far below its July 2025 peak. It also comes before the company reports first-quarter 2026 earnings on May 7.

Coinbase shares reset after first-quarter slide

William Blair analysts Andrew Jeffrey and Adib Choudhury said Coinbase now appears “de-risked” after the recent drop. The stock fell about 26% from its March highs. It is still roughly 60% below its July 2025 peak of $445.

The analysts said lower trading volumes and weaker transaction revenue have already weighed on the shares. They added that these trends have stayed below estimates for much of the year. As a result, they expect Wall Street forecasts to move lower.

They wrote, ”We expect Street estimates to move lower … but this should not surprise investors.” They also said soft first-quarter results may not change market sentiment much. That is because investors have already seen weaker trading conditions.

This view keeps the focus on the angle that Coinbase shares look “de-risked” after the selloff. It also suggests that short-term weakness may already be priced in. For William Blair, that changes the risk picture around the stock.

USDC growth adds support for Coinbase and Circle

A major part of the bullish case is USDC, Coinbase’s main stablecoin partner. William Blair said USDC continues to take market share from Tether’s USDT. That trend has also supported a stronger view on Circle.

Data cited in the report showed USDC holds about 27% of the $300 billion stablecoin market. That figure was about 21% in 2024. The shift points to steady growth in USDC use across crypto transactions and payments.

The analysts said Coinbase offers a “call option” on further USDC commercialization. In simple terms, they see more room for growth from broader USDC use. That growth could help both Coinbase and Circle at the same time.

They also noted that newer issuers, including PayPal and World Liberty Financial, have smaller positions. Even so, USDC has kept gaining ground. That has made Circle’s outlook more attractive in William Blair’s view.

Broader product push strengthens Coinbase case

William Blair also pointed to Coinbase’s wider product lineup. The exchange has expanded beyond spot crypto trading. It now includes derivatives, staking, equities trading, and prediction markets.

That broader offering may help Coinbase rely less on one source of revenue. It may also help the company compete better during slower trading periods. This is another reason the firm sees better balance in the stock.

The analysts also pushed back on forecasts of a long crypto slowdown. They called a weak market over the next year or two a “low-probability outcome.” They said Coinbase offers “asymmetric upside” if the crypto market improves.

For now, the report presents Coinbase as a stock with lower near-term downside after its selloff. At the same time, rising USDC adoption is improving Circle’s setup. That keeps both companies tied to stablecoin growth and a possible market recovery.

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