Coinbase’s (COIN) recent slump is an “air pocket,” not a warning sign, investment bank William Blair said in a report on Monday.

The bank reiterated its outperform rating on the stock and urged investors to treat the crypto sell-off as a buying opportunity.

Coinbase shares were 2.6% higher in early trading, at $246.53.

The report made the same argument for outperform-rated Circle (CRCL), down nearly 80% from its 52-week high even as USDC’s market cap holds firm.

With both firms tied to USDC, William Blair expects their stocks to move together, positioning Coinbase as the broader crypto gateway and Circle as the cleaner bet on USDC’s growth, particularly in cross-border B2B payments.

Bitcoin’s drop doesn’t alter that view, according to analysts Andrew Jeffrey and Adib Choudhury. The report attributed the volatility to an immature market where concentrated holdings and a rush of first-time exchange-traded fund (ETF) buyers exaggerate swings.

The bank's analysts see this as growing pains, not a broken thesis, and argued that deeper liquidity and regulatory clarity will eventually help bitcoin settle into a mainstream portfolio role.

Short-term weakness may pressure Coinbase’s trading revenue, but the analysts said the company is still gaining U.S. spot share and building a global derivatives business that adds diversification and cushions volume declines. With roughly one-third of costs variable, the firm expects Coinbase to manage margins while continuing to invest in its platform.

The report also highlighted Coinbase’s rising Subscription & Services (S&S) revenue, now about 40% of total revenue, supported by a resilient $74 billion USDC market cap despite a broad crypto-market drop.

The bank remains confident in its $777 million fourth-quarter S&S estimate, driven in part by USDC rewards, and says staking revenue should benefit from higher yields and fewer redemptions during market drawdowns.

Read more: Coinbase to Snap up Solana-Based DEX Vector as Acquisition Spree Continues