Crypto operating businesses ‘look strong,’ despite weak price action: Bernstein

Crypto markets have continued to post weak price action, with bitcoin bouncing from $82,000 to around $92,000 to end November before falling back to $86,000 on Monday. Analysts at research and brokerage firm Bernstein said the sector is "still looking for clear signs for bitcoin to bottom out," but argued this downturn differs from previous corrections because core crypto operating businesses "look strong" as they actively reshape their models toward new revenue lines.

In a note to clients on Monday, the analysts led by Gautam Chhugani acknowledged that the weak sentiment has also impacted crypto-related equities, noting that Coinbase dropped 21% over the past 30 days, Circle is down 37%, and Robinhood has fallen 12%. Nevertheless, the analysts said that most speculative excess is confined to long-tail Strategy copycats, and reiterated their view that there is "no realistic scenario" that threatens Strategy's longevity.

Bernstein emphasized that operating performance across the industry contrasts sharply with market prices, pointing to ongoing business model overhauls and regulatory tailwinds as examples of underlying resilience. In the analysts' view, the sector is entering a phase where companies are executing strategies that were previously constrained by regulatory uncertainty, expanding beyond cyclical trading revenue.

Crypto firms pursue new capital markets, tokenization, and consumer-app strategies

Bernstein highlighted Coinbase as one of the clearest examples of this shift. The firm said Coinbase is pushing hard on its "everything exchange" strategy, designed to combine crypto trading, tokenized equity markets, prediction markets, and consumer payments into a single platform.

This comes after years in which its model was tied to market cycles, with trading representing more than half of revenue. "This has meant lower investor interest in underwriting crypto market prices," the analysts said. "Coinbase is still not seen as a mainstream financial super app, despite Coinbase's stablecoin business forming ~20% of revenues. Investors continue to see different parts of Coinbase's business (staking, stablecoins, custody etc.) correlated to the crypto markets."

However, recent regulatory developments, including the GENIUS Act and an anticipated market-structure bill, are now allowing Coinbase to expand more aggressively in areas where international competitors such as Binance were previously more flexible and captured a higher share of the global market, according to the analysts. Coinbase recently acquired a token-launch platform and helped facilitate Monad's $269 million fundraising, which drew over 85,000 investors from more than 70 countries and was 1.43x oversubscribed, they noted, with new token issuances also trading on Coinbase, contributing to additional fee revenue.

"We estimate Coinbase probably earned a success fee on the amount raised (~ 2-5% guesstimate)," the analysts said. "We expect Coinbase to launch more such offerings in the coming days."

Bernstein said Coinbase is expected to launch additional tokenized-equity trading and prediction markets at its Dec. 17 event, aiming to let users trade crypto, equities, and prediction contracts on one platform while settling in USDC.

Coinbase is also expanding its derivatives business — supported by its prior $2.9 billion Deribit acquisition — with futures and options already making up more than 5% of the company’s trading revenue in Q3. This positions Coinbase to compete directly with broker-dealers such as Robinhood as both firms move toward multi-asset financial apps, the analysts said.

Furthermore, at the consumer layer, Coinbase is building the Base app (formerly Coinbase Wallet), a vertically integrated wallet connecting Base applications with stablecoin payments, social content rewards, and access to thousands of assets, described by the analysts as a "crypto Venmo." 

Bernstein argued that these developments, combined with strong operating execution across the sector, make the current market correction a long-term opportunity rather than a sign of structural weakness.

Gautam Chhugani maintains long positions in various cryptocurrencies. Bernstein or its affiliates may receive compensation for investment banking and advisory services from Strategy and Circle. Certain affiliates of Bernstein act as market makers or liquidity providers in the equity securities of Robinhood and Coinbase.

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