Stocks of cryptocurrency companies such as Coinbase Global (COIN) and Circle Internet Group (CRCL) are down after U.S. President Donald Trump signed into law a bill that regulates stablecoins.
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Trump has signed the “GENIUS Act” into law, marking a huge win for the crypto industry that had been lobbying for a regulatory framework to gain greater legitimacy among investors. The crypto legislation landed on Trump’s desk after it was passed in the U.S. House of Representatives by a vote of 308 to 122, following earlier approval in the Senate.
The GENIUS Act bans yields, or interest payments, on regulated stablecoins, a move that is helping to boost cryptocurrencies such as Ethereum (ETH) that provide yield generation. Ethereum is currently trading near $3,800, its highest level of the year. Stablecoins are cryptocurrencies whose value is pegged to an underlying asset, typically the U.S. dollar or price of gold.
Use Case
Stablecoin use has exploded in recent months, with some Wall Street banks such as Bank of America (BAC) announcing plans to launch their own stablecoins. However, news that Trump signed the GENIUS Act into law has crypto stocks such as Coinbase and stablecoin issuer Circle trading lower. Analysts say investors are taking profits after a bull run in the lead-up to the legislation’s passage.
Other well-known crypto stocks such as Strategy (MSTR) and miners such as Riot Platforms (RIOT) are also trending lower or trading flat on July 22. At the same time, cryptocurrencies are advancing, with prices for digital assets such as Solana (SOL) climbing 5% and Bitcoin (BTC), the largest cryptocurrency by market capitalization, up 2% in the past 24 hours.
Is COIN Stock a Buy?
The stock of Coinbase Global has a consensus Moderate Buy rating among 25 Wall Street analysts. That rating is based on 13 Buy, 11 Hold, and one Sell recommendations issued in the last three months. The average COIN price target of $342.40 implies 18.43% downside risk from current levels.
