Coinbase Stock Jumps as Crypto Market Rallies on Fed Rate Cut Hopes.

Shares of leading blockchain infrastructure company Coinbase (COIN) saw a notable surge in trading Tuesday, climbing as much as 3.1% in the morning session. The move was part of a wider rally across the cryptocurrency market, which pushed the total sector capitalization above $4.1 trillion, driven by favorable economic data and growing optimism among institutional investors.

The primary catalyst for the market’s bullish turn was recent U.S. inflation data, which came in cooler than expected. This has significantly reinforced market expectations for a Federal Reserve interest rate cut. According to the CME FedWatch Tool, traders are now pricing in a 96% probability of a rate reduction in September. Lower interest rates typically reduce the appeal of traditional savings and bond yields, encouraging investors to seek higher returns in assets like cryptocurrencies and stocks, including Coinbase.

This economic environment is proving particularly attractive to institutional players. Their trading activity now dominates the Coinbase platform, accounting for an impressive 75% of the total Bitcoin volume, signaling a deep and growing commitment from large-scale investors.

Analysts See an “Alt Rally” on the Horizon

Adding to the positive sentiment, analysts at research firm Bernstein have declared that an “alt rally”—a market phase where digital assets other than Bitcoin experience strong gains—has already begun. They identified Coinbase as uniquely positioned to be the “biggest beneficiary” of this trend. With an extensive list of over 250 tradable tokens, Coinbase offers investors broad exposure to the burgeoning altcoin market, a key advantage over competitors with more limited offerings.

While the stock experienced an initial pop, it later settled to a more modest gain, closing at $328.20, up 1.8% from the previous day.

Context is Key: Volatility and Recent Developments

Despite the positive news, it’s important to view Coinbase’s performance within a broader context. The stock is known for its extreme volatility, having experienced 62 single-day moves greater than 5% over the last year. While today’s news was significant, it didn’t fundamentally alter the market’s overall perception of the business.

This rally follows another recent surge just two days prior, when the stock gained 7% as the price of Bitcoin neared its all-time high, fueled by strong institutional demand and general optimism about the wider adoption of crypto. Sentiment has also been bolstered by a recent executive order that could potentially open the door for workers to invest in crypto through their 401(k) retirement accounts.

Furthermore, Coinbase has been actively innovating its product. The company recently rolled out a significant update integrating decentralized exchange (DEX) trading directly into its main app. This feature expands access for its U.S. customers to millions of new tokens on its proprietary Base network, making on-chain trading faster and more accessible.

From a long-term perspective, Coinbase stock is up 27.6% since the beginning of the year. However, at its current price, it remains 21.8% below its 52-week high of $419.78. For early investors, the journey has been a rollercoaster; $1,000 invested at the company’s IPO in April 2021 would be worth approximately $999.76 today, highlighting the stock’s volatile yet ultimately sideways performance over the long term.