Key Insights

• Coinbase stock rose after the company launched a Bitcoin-backed mortgage product.
• The initiative is a partnership between Coinbase and Better Finance.
• Technical traders are watching for an island-reversal pattern, which could signal a near-term pullback.

Coinbase stock extended its August recovery as Bitcoin moved back above $80,000 and investors assessed the rollout of Better Mortgage’s crypto-backed home-financing product.

COIN has gained more than 20% over the past five sessions during the latest crypto-market rebound. The mortgage initiative adds another product to Coinbase’s effort to move beyond traditional spot cryptocurrency trading, an effort that matters because the company has been trying to reduce its dependence on transaction-heavy revenue tied to market swings.

Coinbase Stock Rises as Bitcoin Mortgage Access Expands

Coinbase, the largest crypto exchange in the United States, has been working aggressively to diversify its business. In a statement on August 26, the company said it was launching Bitcoin-backed mortgages in partnership with Better Finance.

The process is designed to work in several steps. First, a customer obtains a mortgage from Better Finance. Second, the customer pledges Bitcoin holdings to secure the mortgage. After that, customers receive rebates of up to $10,000. Once the mortgage is paid off, the Bitcoin is returned to the customer.

The business is capital-light for Coinbase because the company will not originate the loans itself. Instead, it will collect a commission from the transaction, which fits its broader strategy of adding services without taking on the same balance-sheet risk as a lender.

A Bitcoin holder may choose to take out a mortgage if he believes the coin will continue rising. In that case, the customer could benefit from both house-price appreciation and the increasing value of Bitcoin. The risk is that Bitcoin’s price could fall.

The company says this is a sizable market, given that millions of Americans have mortgages, which are now valued at more than $13.1 billion.

Coinbase Continues to Diversify Its Business

The new product is one example of how Coinbase is expanding its operations. In 2024, it launched a major partnership with Morpho to introduce Bitcoin-backed loans. That business has continued to grow, with Morpho now reporting a total value locked (TVL) of more than $9.4 billion. It is among the top protocols that have seen strong growth during the crypto winter.

Coinbase has also launched a new prediction platform, positioning itself as a competitor to companies such as Polymarket. That business saw strong growth during the recent World Cup event. Like Robinhood, Coinbase is likely to create its own prediction platform, allowing it to avoid sharing revenue with Kalshi.

The company has also evolved into an all-in-one trading platform and has added assets such as stocks and ETFs. This expansion is intended to give Coinbase a more diversified model, helping it continue growing even when the crypto market is under pressure.

However, the most recent results showed that the business remains under strain, with revenue falling by double digits. Transaction revenue dropped to $599 million in the second quarter from $764 million in the same period last year. Subscription and services revenue also declined to $555 million during the quarter.

Analysts expect the weakness to continue, with third-quarter revenue projected to fall by nearly 40% to $1.16 billion. Earnings per share are expected to swing to a 14-cent loss, compared with a $1.5 profit previously.

Coinbase Stock Price Technical Analysis

The daily chart shows that COIN has rebounded, rising from a low of $137.87 to a high of $181. That low was an important support level because it matched the stock’s lowest points in February and June.

The stock has also moved above the descending trendline connecting the highest swing since April and climbed above the 50-day moving average.

The risk, however, is that COIN has formed a fair value gap and an island-reversal pattern, which suggests a possible near-term reversal. If that happens, the stock may fall back to $137.

The post Coinbase Stock Forecast as it Launches Bitcoin-Backed Mortgages appeared first on The Market Periodical.