Shares of Coinbase Global Inc. (COIN) experienced a significant increase on Friday following an upgrade from JPMorgan Chase, which pinpointed fresh monetization possibilities linked to its Base network and the USDC payout revision.
The bank’s analysts upgraded their rating to Overweight from Neutral and elevated the price target to $404 per share, signifying approximately a 15% potential upside from present values.
JPMorgan indicated that Coinbase is actively engaging with its Base layer-2 blockchain, seeking to efficiently harness value from the growth of the platform.
The bank estimates that the launch of a Base token could unveil a market opportunity between $12 billion to $34 billion, with Coinbase’s share potentially amounting to $4 billion to $12 billion. Analysts remarked that distribution of the token would likely focus on developers, validators, and the Base community.
Additionally, the report highlighted the margin enhancement prospects stemming from alterations to Coinbase’s USDC rewards program. JPMorgan noted that Coinbase might lessen interest rewards for most users while concentrating them mainly on Coinbase One subscribers — an adjustment that could bring in an estimated $374 million in yearly earnings based on current USDC yields and interest rates.
Post-upgrade, COIN shares leaped over 9% on Friday, hovering around $353. The stock has now surged nearly 42% since the start of the year, pushing Coinbase’s market cap to approximately $90.6 billion.
Coinbase (COIN) stock. Source: Yahoo Finance
Related: Coinbase splashes $25M to revive a podcast from the last bull run
Coinbase’s Earnings Under Spotlight
Coinbase is about to disclose its third-quarter results on October 30. Analysts anticipate the company will report earnings of $1.06 per share, representing a 71% increase year over year, alongside revenues of $1.74 billion — a 44.1% uptick from the same quarter last year.
This forthcoming report comes after a mixed second quarter, wherein Coinbase fell short of earnings expectations yet accomplished various operational goals, such as increased stablecoin balances and enhanced stablecoin-related revenue.
The enterprise has been intensively focusing on its subscription and services sector, projected to yield between $665 million to $745 million in the third quarter.
Among significant developments this quarter, Coinbase underscored the approval of the GENIUS Act, which instituted a clear regulatory structure for US stablecoin adoption, in tandem with the House’s passage of a comprehensive market framework bill envisioned as a step toward transparent crypto regulation.
Related: Coinbase CEO reveals ‘private transactions’ are coming to Base
