Coinbase shares experienced significant fluctuations recently, trading at $213.65 on Thursday

This volatility occurs against a backdrop of major regulatory developments, as the SEC has announced the withdrawal of its civil lawsuit against Coinbase Inc.

Coinbase shares experienced slight gains on Thursday, trading at $213.65. While the stock has lost about 39% from its 52-week high of $349.74, it has risen more than 30% from its September low of $146.14.

The company's shares have been volatile in recent times, and this volatility occurs as major regulatory developments unfold. The SEC has withdrawn its civil lawsuit against Coinbase Inc. and Coinbase Global Inc., according to a joint filing on Wednesday.

This decision follows the creation of the Crypto Task Force earlier in January to coordinate the development of a uniform regulatory framework for cryptocurrencies.

Coinbase showcased strong financial performance in the last quarter, reporting a 138.17% surge in revenue to $2.27 billion and a significant increase in earnings per share from $1.14 to $5.13 compared to the previous year.

Stablecoins: A Key Driver of Positive Outlook

The company's stablecoin business, especially USD Coin (USDC), continues to grow, with USDC now reaching a market cap of about $56.2 billion. The broader stablecoin market nearly doubled between August 2023 and August 2024, expanding from $121 billion to $224 billion.

Proposed legislation like the "GENIUS Act" could place major stablecoins under Federal Reserve oversight, potentially enhancing market confidence and security. The current administration's supportive stance toward the cryptocurrency sector, viewing stablecoins as instruments to reinforce the dollar's global dominance, may continue to positively influence Coinbase's stock performance.

Despite these positive developments, Chief Legal Officer Paul Grewal recently sold shares worth about $2.33 million, with prices ranging between $206.63 and $222.48 per share.