Coinbase Partnership with Circle Estimated to Generate $60 Billion Value
JPMorgan's report highlights the financial benefits of Coinbase’s partnership with Circle and its exposure to the USDC stablecoin:
- The estimated value of Circle-related economics for Coinbase shareholders is $55 to $60 billion.
- Coinbase holds 8.5 million shares in Circle, valued at $1.6 billion as of July 25.
- In Q1, Coinbase earned approximately $300 million from distribution payments from Circle, exceeding Circle's net revenue of $230 million.
- At the end of Q1, Coinbase had $13 billion in USDC balances on-platform, generating $125 million in revenue at 20-25% margins.
- Off-platform, Coinbase generated $170 million last quarter from the Circle Reserve Fund income, split 50/50, with nearly 100% margin.
- JPMorgan maintains a neutral rating on Coinbase stock with a price target of $404; shares were around $381 in early trading Tuesday.