Coinbase Global Inc. shares are on track for their first record in more than three years, capping off a rally fueled by growing acceptance of the cryptocurrency industry on Wall Street and in Washington.

The crypto-exchange operator’s stock was up 4% on Thursday, trading at $369.98 — higher than the peak close of $357.39 in November 2021, just months after the company went public through a direct listing.

Coinbase shares have surged more than 1,000% from a record low in late 2022, which came as the collapse of FTX raised questions about the future of digital assets. The stock’s comeback occurred as cryptocurrency prices rebounded and the industry won powerful new allies, including US President Donald Trump. Just last month, Coinbase was added to the prestigious S&P 500 Index.

The rally’s final leg occurred after the US Senate passed legislation for stablecoins pegged to the dollar, which are seen as a promising payment method. Revenues from sources like stablecoins will likely allow the company to reduce its reliance on trading revenue that is coming under pressure as competition grows, Benchmark analyst Mark Palmer said.

“A new high for the stock would be validation of the road map that Coinbase management had laid out to diversify its platform and position itself for long-term growth,” Palmer said. “It also signals that the market is acknowledging that crypto is here to stay.”

Coinbase shares are up more than 40% since the Senate bill passed last week. The exchange has a revenue-sharing agreement with newly public stablecoin issuer Circle Internet Group Inc., which also staged a furious rally. Shares of traditional payment firms Mastercard Inc. and Visa Inc. have been under pressure lately, even though the companies have their own stablecoin initiatives.

Crypto-linked stocks are notoriously volatile, and Coinbase shares will likely remain vulnerable to another downturn in token prices. Wall Street’s predictions suggest the stock is overpriced, with the average target sitting at just $287, according to data compiled by Bloomberg.

Yet Palmer, who has a buy rating on the shares, sees a further surge to $421. In a note dated Wednesday, Bernstein analyst Gautam Chhugani raised his price target to a Street-high of $510 — above the stock’s intraday record of $429.54 on the day of its 2021 debut.

“The US government intends to bring in a new digital assets framework including the stablecoin bill and a digital asset market structure bill, which would bring crypto capital markets back to the US,” wrote Chhugani, who rates the shares as outperform. “As the regulatory headwinds for the crypto industry have receded, Coinbase has emerged as the premier crypto financial platform,” he said.