Coinbase shares rocket following the JPMorgan upgrade based on Base network expansion and USDC monetization prospects. The market cap approaches 91B with investor confidence.
Coinbase Global Inc. stock rose over 9% on Friday following an upgrade of the crypto exchange stock by JPMorgan Chase.
JPMorgan increased its price target to $404 or approximately 14-15 percent more than it was, which triggered a buying spurt and investor enthusiasm regarding emerging sources of revenue inherent in the Base layer-2 network and monetization of USDC plans by Coinbase.
This upgrade took Coinbase to an approximate market cap of 90.6 billion with an annual gain of 42 percent.
The upgrade by JPMorgan reveals the strategic decision by Coinbase to leverage its Base blockchain, which, since its launch in 2023, has grown quickly.
The bank estimates a potential market value of up to $12 billion to $34 billion in a Base token, with Coinbase inheriting a value of 4 billion to 12 billion.
Provided this token is launched, it would prioritize the developers, validators, and the Base community over retail investors.
Coinbase CEO Brian Armstrong indicated that it had token plans to enhance decentralization and ecosystem expansion.
Coinbase (COIN) stock. Source: Yahoo Finance
USDC Reward Shift Could Boost Coinbase Profit Margins Significantly
The other significant trigger that made JPMorgan take a bullish position is the expected redesign of the USDC stablecoin rewards program at Coinbase.
The exchange will cut the interest payments for general users and save most of the rewards for Coinbase One subscribers.
This move would contribute approximately 374 million to the annual revenues of Coinbase through the maximization of the revenue streams relating to the stablecoins in an increasingly large subscription base.
This move goes in line with Coinbase taking a new direction to mix income other than trading fees.
Analysts believe that the next Coinbase earnings on October 30 will grow substantially with an estimated earnings per share of 1.06, which is 71 percent higher than last year, based on subscription and service turnover.
The recent regulatory innovations, such as the GENIUS Act and market structure law, are also positive contributors to the business perspective of Coinbase, which serves as an investment boost.
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