Coinbase (COIN) shares climbed nearly 10% on Monday, reaching $191.50, after President Trump made key concessions on the CLARITY Act. The stock remains more than 37% above its yearly low, but traders are increasingly skeptical the bill will become law.
Trump's concessions and market reaction
The revised CLARITY Act now allows state attorneys general to enforce violations, not just the Justice Department. It also requires government officials to divest significant crypto holdings, a provision highlighted by Trump's reported $2 billion in crypto earnings last year. Trump's involvement in crypto—through the TRUMP meme coin, World Liberty Financial, and Trump Media's Bitcoin holdings—has drawn scrutiny.
Despite these concessions, Polymarket odds of the bill passing this year have fallen to 19%, down from nearly 80% earlier. This uncertainty weighs on Coinbase, which would benefit from the act's shift of regulatory authority from the SEC to the CFTC. Coinbase has had a contentious history with the SEC, and a friendlier regulator could ease compliance burdens.
Coinbase's business transition
Coinbase is diversifying beyond crypto trading. It has tokenized real-world assets like stocks, commodities, and ETFs, and partnered with Kalshi in prediction markets. These moves aim to reduce reliance on volatile crypto trading volumes.
Analysts are taking note. Compass Point upgraded COIN from sell to neutral, raising its target to $177. Morgan Stanley initiated coverage with a $250 target, and Goldman Sachs lifted its target to $219. The broader crypto market remains resilient, with Bitcoin above $78,000 and total market cap over $2.6 trillion.
Technical outlook
COIN's chart shows a bullish flag pattern, with the stock above its 50-day EMA and just above the July 21 high of $181. A break above $193 resistance could signal further gains. However, the CLARITY Act's uncertain fate and potential regulatory headwinds could cap upside.
Investors should monitor the Senate cloture vote scheduled for Tuesday, as its outcome will likely drive near-term volatility. For more on the legislative process, see the upcoming Senate vote. Additionally, the broader implications for crypto exchanges are discussed in this analysis of potential beneficiaries.
While Coinbase's diversification strategy is promising, the stock's fate remains tied to regulatory clarity. The CLARITY Act's passage would be a major catalyst, but current odds suggest it's far from certain.
This article is for informational purposes only and does not constitute financial advice.
