Coinbase Global Inc.

The stable outlook reflects our expectation that Coinbase will maintain adequate liquidity and navigate the regulatory landscape without business interruption. The stable outlook also indicates our expectation that Coinbase will continue to diversify its revenue streams and maintain its reputation as a leading custodian of crypto assets. We could raise the ratings over the longer term if: Volatility in earnings declines, for example, because of increased contribution from nontransaction revenue without incrementally increasing risks; or Regulatory changes prove less disruptive than expected for the company's business model. We could lower the ratings over the next 12 months if: Regulatory changes prove disruptive for the company's business model; or Liquidity deteriorates, for example, because trading volumes remain more depressed than we

...Regulatory clarity for the digital asset industry in the U.S., which has lagged other regions, could emerge under a crypto-friendly Trump administration. The unclear regulatory framework has been a headwind for the business models of crypto players, including Coinbase, because of the "regulation by enforcement" approach under the Biden administration. These factors drove trading volumes away from the U.S. to offshore exchanges, hurting transaction revenue for U.S. crypto exchanges. While this could change under the new administration, it may take time due to other priorities including trade and taxes. It is also unclear if Trump's campaign promises will turn into policy actions. The potential for increased regulatory clarity has also attracted large players such as Charles Schwab to potentially enter spot cryptocurrency trading, increasing the risk of fee compression in the longer term. Coinbase's operating performance has improved due to strong operational discipline, expansion efforts,...

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