Coinbase’s stock climbed sharply following positive remarks from JPMorgan Chase, which upgraded its rating on the cryptocurrency platform. Analysts noted that new earning opportunities related to the Base network and changes in the USDC rewards strategy contributed to the upgrade.

Insights from JPMorgan

The investment firm revised its rating on the stock from ‘Neutral’ to ‘Overweight’ and set a new price target of $404 per share, indicating a potential increase of around 15%. JPMorgan remarked that Coinbase is “leaning into” its Base layer-2 blockchain while finding methods to optimize the value it extracts from the platform’s expansion.

The analysis predicts a significant market potential of $12 to $34 billion from the forthcoming Base token, estimating that Coinbase could retain a worth of between $4 billion to $12 billion from it. The token’s distribution appears set to favor developers, validators, and the Base community.

Changes to USDC Payouts

Furthermore, JPMorgan indicated that Coinbase’s USDC rewards program might see alterations that reduce interest payouts for most users, shifting the focus primarily on subscribers of Coinbase One. This adjustment could translate to an annual earnings increase of approximately $374 million based on current USDC yield and interest rates.

Following these updates, Coinbase’s shares rose by over 9% on the same day, reaching about $353, marking a year-to-date increase of roughly 42%, and raising the company’s market capitalization to around $90.6 billion.

Coinbase (COIN) stock Source: Yahoo Finance

Upcoming Earnings Report

Coinbase plans to announce its third-quarter financial results on October 30, with analysts anticipating earnings of $1.06 per share, marking a 71% year-over-year increase on estimated revenue of $1.74 billion—an increase of 44.1% compared to the previous year’s corresponding quarter.

This report follows a mixed second-quarter performance, where Coinbase failed to meet a few earnings expectations yet achieved critical operational benchmarks, such as an increase in stablecoin reserves and enhancements in stablecoin-related income.

Coinbase is focusing more on its subscription and services arm, expected to yield between $665 million to $745 million in the third quarter.

Notably, the approval of the GENIUS Act has provided a clearer regulatory structure for US stablecoin adoption, a significant development in the current market landscape.