As Ethereum prices surge to multi-year highs, research and brokerage firm Bernstein says Coinbase stands to gain the most from the ongoing “alt season” — a period when cryptocurrencies other than bitcoin outperform the market leader.
In a Monday client memo, analysts led by Gautam Chhugani highlighted Coinbase as one of the most Ethereum-aligned public companies, noting that ETH has climbed 80% since June 5. The rally began shortly after stablecoin issuer Circle announced its high-profile IPO, which drew investor attention to the fact that most stablecoins are built on Ethereum.
On Friday, ETH broke $4,000 for the first time in eight months before climbing as high as $4,350 on Monday — its strongest level since 2021. As of publication, it was trading at $4,186, still about 14% below its November 2021 all-time high of $4,878.
Coinbase’s Ethereum Advantage
Bernstein says Coinbase is well-positioned to ride the momentum. With over 250 listed tokens and integration of Base chain assets directly into its app, the exchange captures trading fees across a broad swath of Ethereum-linked markets. Base, Coinbase’s own Layer 2 network, processes over 9 million transactions daily and settles gas fees in ETH, bringing in roughly $75 million annually in sequencer fees.
Coinbase also benefits from brokerage fees tied to Base chain tokens and the growing adoption of its Base App. Its staking business — predominantly ETH — accounts for around 10% of total revenue, a figure analysts expect to climb alongside asset prices. The company also holds a sizable ETH treasury of 136,782 coins, worth about $570 million at current prices.
Q3 and Q4 Outlook
Coinbase shares fell more than 15% after Q2 earnings last month, but Bernstein urged investors to look past those results, noting the crypto market recovery only began in July. Trading volumes in that month were already running 40% above the Q2 average, and analysts expect ETH’s rally to drive strong activity through the second half of the year.
“A rising ETH followed by a wave of ETH-linked tokens translates to surging trading volumes and fees,” Chhugani wrote. “We expect Q3 and Q4 to be strong quarters, with consensus estimates likely to move higher.”
Other Beneficiaries of Ethereum’s Growth
Bernstein also pointed to Robinhood, which has expanded its token listings to more than 30, launched Ethereum staking, and is developing its own Layer 2 network for asset tokenization. Circle, whose USDC stablecoin is primarily issued on Ethereum, has grown its supply 7% over the past three months to over $65 billion, benefiting from demand in smart contracts and onchain collateral.
Spot Ethereum ETFs are another potential growth channel. BlackRock’s iShares Ethereum Trust (ETHA) proposal includes staking to generate an estimated 2.9% ETH yield, incorporating blockchain rewards into the ETF structure. Meanwhile, a new class of “Ethereum treasury companies” is emerging, modeled on bitcoin accumulation strategies but focused on acquiring ETH, staking, and deploying assets in onchain finance.
Still Early in the Cycle
Bernstein believes it is “still early” in the current crypto bull cycle, with multiple avenues for investors to gain exposure to Ethereum’s growth. While Coinbase appears to be the largest public beneficiary, the analysts argue the broader Ethereum ecosystem offers diverse opportunities — from exchanges and stablecoin issuers to ETFs and treasury firms — for those looking to participate in the rally.
