Coinbase Soars as Trump Sides With Crypto Over Banks

Coinbase shares jumped sharply in premarket trading after President Donald Trump publicly supported the crypto exchange's position in a legislative battle with major banks. The surge followed a private White House meeting between Trump and Coinbase CEO Brian Armstrong, after which Trump posted on Truth Social urging banks to 'make a good deal with the Crypto Industry.'

The meeting signals unusually direct access for Coinbase to the current administration and comes at a critical moment when the CLARITY Act, which would establish a comprehensive federal framework for digital assets, has stalled in the Senate. The core dispute centers on whether crypto exchanges should be allowed to offer yield-bearing rewards programs on stablecoins.

Coinbase has been paying customers up to 3.5% annual yield on certain stablecoins, far exceeding the sub-0.1% average from traditional bank checking accounts. Banking giants including JPMorgan Chase and Citigroup have lobbied aggressively to restrict or ban such programs, arguing they could trigger deposit migration away from conventional banks.

The Trump-Armstrong meeting represents a dramatic shift in the political dynamics, with the White House now openly pressuring banks to compromise with the crypto industry. This development comes as Coinbase stock has been under pressure, having shed 19.36% year-to-date and 11.37% over the past year.

Despite recent weakness, the stock bounced 5.64% in premarket trading to $192.65, reflecting investor optimism that White House support could break the legislative logjam that has hampered crypto regulation for years.

This political development matters because regulatory clarity has been the single biggest obstacle to mainstream crypto adoption and Coinbase's growth trajectory. The White House taking Coinbase's side against traditional banking interests could accelerate the passage of favorable legislation that would provide much-needed certainty for the entire industry.

For Coinbase specifically, successful legislation would validate its business model and potentially unlock new revenue streams. The company's ability to offer competitive yield products without regulatory uncertainty would significantly enhance its value proposition to customers who currently earn minimal returns on traditional bank deposits.