Key Insights:
- Coinbase stock dropped 6% after the exchange withdrew support for a key crypto market structure bill.
- Citron Research accused Coinbase of opposing the bill to limit competition from tokenization firms.
- Investors now watch regulatory talks and key support levels for signs of a COIN rebound.
Coinbase (COIN) stock fell more than 6% after the company pulled its support for a key crypto market structure bill. This triggered backlash from investors, lawmakers, and industry players. It raised new questions about regulation, competition, and the outlook for COIN shares.
Citron Research Criticizes Coinbase’s Stance on Crypto Bill
Coinbase stock came under pressure after Citron Research publicly criticized the exchange for stepping back from the crypto market structure legislation moving through the US Senate.
Citron argued that Coinbase’s opposition was not about protecting the industry, but about limiting future competition.
In a post that gained wide attention, Citron said Coinbase wants the benefits of regulatory clarity without allowing space for rivals that could gain from clearer rules. The research firm pointed directly to Securitize, a tokenization platform backed by BlackRock, as a major beneficiary if the bill moves forward.
Securitize has already issued more than $4 billion in tokenized assets and holds licenses that allow it to offer tokenized securities. Citron said this puts Securitize in a strong position if regulators set clear rules. Coinbase, on the other hand, could face direct competition in areas it currently dominates.
Citron framed the dispute as a broader power struggle. It described the moment as Coinbase Chief Executive Brian Armstrong standing against Wall Street giants and political forces aligned with tokenization.
The post also pointed out that Coinbase Ventures was an early investor in Securitize in 2018, adding another layer to the situation.
The market reacted quickly as shares of Cantor Equity Partners II, the SPAC planning to take Securitize public in early 2026, jumped as much as 10% after Citron’s support. Coinbase stock moved in the opposite direction, falling sharply as investors digested the implications.
Did Coinbase Reaction Stem from a Misread of the Bill?
After the backlash, industry voices suggested that Coinbase may have taken parts of the bill out of context. According to reporting from Capitol Hill, the main issue centered on Section 505, which deals with tokenized securities. This section does not immediately ban tokenized equities.
Instead, it calls for a study and leaves room for future rulemaking by the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Tokenization firms argued that the language was misinterpreted and does not impose direct restrictions. Some lawmakers and staffers said the bill is not dead. While the Senate Banking Committee cancelled its scheduled markup, discussions are ongoing between banks, Democrats, and Coinbase.
Several sources said that if a deal can be reached on yield-related concerns, the legislation could move forward. Brian Armstrong and others have also indicated that changes to Section 505, or even its full removal, remain possible.
Ethics concerns tied to the bill are still unresolved, and talks between the White House and Senate leaders are continuing.
There is also debate over whether delays in the Banking Committee will affect the Agriculture Committee timeline. Sources close to the process said order does not always matter. Notably, a successful bipartisan vote in one committee could ease passage in another, as seen in the House last year.
Coinbase (COIN) Stock Outlook After the Sharp Selloff
Coinbase (COIN) stock closed down nearly 6% to $239.38 on the day of the backlash, with losses extending intraday before stabilizing.
The drop erased part of the recent gains and pushed the stock closer to key technical levels watched by traders.
Market data shows COIN stock testing a long-term support trendline that has held during prior selloffs. Technical analysts say that if this level holds, the stock could see a rebound. Some chart watchers point to a possible recovery range between $300 and $400 over time, though volatility remains high.
Fundamentally, Coinbase still operates one of the largest crypto platforms in the world, but regulatory risk continues to weigh on sentiment. The current episode highlights how closely Coinbase stock is tied to policy decisions in Washington.
Investors are now watching two things closely: whether lawmakers revive the crypto bill and whether Coinbase adjusts its public stance. Until there is clarity, Coinbase stock is likely to remain sensitive to headlines, with sharp moves in both directions still possible.