Coinbase (COIN) has established the industry's most scaled crypto trading platform with a domestic market share of around 66%, broker Benchmark said in a report Wednesday, while also initiating coverage of the stock.

Benchmark assumed coverage of Coinbase with a buy rating and a $252 price target. The shares were over 4% higher at around $198 in early trading.

The crypto exchange offers a "comprehensive suite of products and services aimed at facilitating the adoption and use of digital assets by both retail and institutional investors," analyst Mark Palmer wrote.

The broker noted that the stock has almost halved since early December, and at current levels the share price does not reflect the soon to improve crypto environment.

Share price underperformance may be coming to an end as crypto regulatory clarity draws closer in the U.S., particularly for stablecoins, where Coinbase has skin in the game with its involvement in USD Coin (USDC), the report said.

Regulation is coming. Earlier this month, a House of Representatives committee joined Senate counterparts in advancing a bill to be considered by the overall House, bringing stablecoin regulations closer to reality.

"As these key pieces of digital assets legislation are enacted in the coming months, there could be a new wave of demand for crypto by an expanded set of institutional investors," Palmer said.

The company's diversified product offering is also a positive, and Coinbase's valuation is set to benefit from its 'faster growing non-trading subscription and services offerings," the report added.

Read more: Stablecoin Market Could Grow to $2T by End-2028: Standard Chartered

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