Every industry has a version of “I like you, but I’m not ready to commit.” Landlords use it on promising tenants with thin credit files. Venture capitalists use it on founders with a great pitch and no revenue yet. This week, Wall Street used it on Coinbase.

Morgan Stanley initiated coverage of Coinbase Global (COIN) on Thursday with an Equal-weight rating and a $250 price target, according to a Morgan Stanley note shared with TheStreet.

Coinbase closed at $174.72 the day before, so the target implies roughly 40% upside, a gap wide enough that most rating systems would call it a buy.

Coinbase’s upside math skips a buy rating

Analyst Michael Cyprys built that target off 21 times his 2028 earnings estimate, a multiple he says matches Coinbase’s own trading history and its digital-asset peers.

He also modeled a bull case of $400 and a bear case of $50, a $350 spread built around one swing factor: retail crypto trading, which still accounts for nearly 40% of Coinbase’s revenue.

That range explains the rating better than the target does. “We are more constructive on the franchise than the shares at current valuation,” Cyprys wrote in the note shared with TheStreet.

Translation: the business has gotten bigger and more diversified, but the stock still trades like a bet on Bitcoin’s next mood swing.

That gap has a track record behind it. Since Coinbase’s April 2021 direct listing, the stock is down roughly 45% while Bitcoin itself has gained about 26%, according to the same Morgan Stanley note. A company built to profit from crypto’s rise has spent four years failing to capture it.

The same analyst just made the opposite call

Here is the detail most coverage of the initiation has missed. Eleven days earlier, the same analyst made the opposite decision on a similar stock.

On September 1, Cyprys upgraded Robinhood Markets (HOOD) to Overweight from Equal-weight and raised his price target to $150, implying about 43% upside.

The two calls carry almost identical implied upside. What separates them is proof. Cyprys pointed to Robinhood’s prediction-markets business, where event-contract revenue jumped to $156 million in the second quarter from just $10 million a year earlier, as evidence that the company could grow beyond trading volume.

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Coinbase is chasing the same kind of diversification through its self-styled “Everything Exchange,” a push into stocks, prediction markets and tokenized assets that Coinbase itself called a top priority for 2026 in its fourth-quarter shareholder letter filed with the SEC.

Cyprys is not yet convinced it is paying off the way Robinhood’s bet already has.

Three unresolved debates explain the caution

Morgan Stanley’s note lays out what would need to go right, and what could still go wrong, across three areas:

• Regulatory clarity could expand Coinbase’s addressable market as Congress and federal agencies write clearer crypto rules, but the same clarity would let banks and brokers compete more directly on price.
• The Everything Exchange could cut Coinbase’s dependence on crypto trading, but new products like equities and prediction markets typically carry lower fees than its core business.
• Stablecoin and Base revenue could keep growing alongside Coinbase’s USDC balances, but partners such as Hyperliquid are already claiming a larger share of that income to win volume.

The market hasn’t settled the debate either

Coinbase’s own trading suggests investors are just as torn as Morgan Stanley. Short interest in the stock jumped nearly 30% in the week the note landed, reaching 12.4% of shares available to trade, the highest level in a month.

Over that same stretch, Robinhood gained almost 6% while Coinbase fell more than 10%, even though both stocks are routinely grouped together as crypto-adjacent trading platforms.

That divergence is the real story sitting inside this initiation. Wall Street is not doubting Coinbase’s business so much as it is refusing to keep pricing every crypto-linked stock as one trade, and demanding separate proof for each.

The nearest catalyst arrives Tuesday, Sept. 15, when the Senate holds a procedural vote on the CLARITY Act, the market-structure bill Morgan Stanley’s note treats as central to Coinbase’s next chapter.

A strong tally would only confirm one half of Cyprys’s debate, since the same clarity that helps Coinbase would also lower the walls keeping bank competitors out.

The bigger test comes later, when Coinbase reports third-quarter results on the 29th of Oct., and investors get a fresh read on how much non-trading revenue is actually sticking.

If cross-selling into equities, prediction markets, and stablecoins starts showing up the way it already has at Robinhood, Cyprys’s “not yet” could turn into a straightforward buy. Until then, the stock will keep trading on the exact question Morgan Stanley just declined to answer.

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