ClearStreet analyst Owen Lau upgraded shares of crypto exchange Bullish (BLSH) to Buy from Hold on Tuesday, highlighting the company’s growing market share and product expansion, even as he reduced his price target from $60 to $57.
Lau said Bullish’s share of global spot cryptocurrency trading rose from 2.1% in the third quarter to 3.7% in November, taking volume from rivals Bitget, Bybit and Gate. The company’s trading volume in October increased 70% compared to the previous quarter’s monthly average. Lau attributed the gains to Bullish’s post-IPO credibility and its push into new product lines.
Bullish recently rolled out options trading and began operating in the United States after receiving a BitLicense, giving it access to one of the largest crypto markets in the world. The exchange combines a traditional order book with an automated market maker, aiming to provide significant liquidity to retail and institutional traders. Lau said this broader range of services could increase recurring revenue from 28% of total sales in 2024 to 70% by 2027.
Despite a 21% drop in Bullish shares since late October, Lau called the selloff “exaggerated.” He attributed recent weakness in blockchain stocks to macroeconomic concerns and the market’s growing focus on AI.
“The fundamentals of blockchain remain very strong,” he wrote, citing learnings from industry conferences such as Money20/20 and Ripple Swell.
Bullish’s valuation has also reset sharply. The company’s forward EV/EBITDA multiple fell to 25x from 45x in September, bringing it in line with Coinbase after previously trading at a premium. ClearStreet projects that Bullish’s revenue will grow at an annual rate of 25% through 2027, surpassing Coinbase’s 14%.
Lau added that the reopening of the US government this week could restore investor confidence and pave the way for new crypto regulations, including the Clarity Bill. He nevertheless warned that rising interest rates, competitive pressures and token price volatility remain major risks for the exchange.
Bullish is the owner of CoinDesk.
