I remain invested.
JPMorgan estimates that Coinbase could unlock up to USD 34 billion in additional enterprise value with its own token for the Base layer 2 network.
The US investment bank JPMorgan sees Coinbase's Layer 2 network Base as a key growth driver for the crypto exchange operator. In a report published on Friday, the analysts estimate that a potential Base token could achieve a long-term market value of between twelve and 34 billion US dollars. Accordingly, Coinbase would retain around 40 percent of the tokens and thus generate between four and twelve billion US dollars in additional equity value.
According to JPMorgan, the move marks a new phase of monetization for Coinbase, which could open up additional revenue streams in the decentralized ecosystem alongside on-chain trading and revenues from the USDC stablecoin. Coinbase launched the Base layer 2 network in August 2023, which currently has more than USD 5 billion in total value locked and over nine million daily transactions, according to DefiLlama data.
The bank highlights that Coinbase is currently reviewing changes to its USDC rewards program. To date, the company has passed on a large part of the interest income - around USD 400 million annually - to users. In the future, these payments could only be made to subscribers of the paid service Coinbase One. If this adjustment were implemented, Coinbase could retain around USD 374 million annually.
The report also refers to the integration of a DEX aggregator within the Base app. This function would enable Coinbase to benefit from the growing activity of decentralized exchanges, which now account for around a quarter of the total spot trading volume.
In the course of the assessment, JPMorgan raised its price target for Coinbase shares to USD 404 by December 2026, based on a current price of around USD 354.
Coinbase itself confirmed for the first time in September at the BaseCamp conference in Vermont that it was examining the introduction of a native base token. Project manager Jesse Pollak explained that a token could "accelerate decentralization and open up new opportunities for developers". CEO Brian Armstrong added at X that "no final decisions" had been made.
New customers at Coinbase currently receive 30 euros in Bitcoin when they trade cryptocurrencies worth 30 euros or more.
