"Coinbase's Base Network Positions Firm as Web3 Cornerstone, JPMorgan Says"

Coinbase Global Inc. (COIN) reported a robust third-quarter performance, with revenue surging to $1.9 billion in Q3 2024, a 26% increase from the previous quarter and exceeding analyst forecasts of $1.8 billion, according to the Coinbase Q3 earnings report. This growth was fueled by soaring Bitcoin and Ethereum prices, rising transaction volumes, and the expanding role of its Ethereum layer-2 network, Base. The company's net income stood at $433 million, down from Q2's $1.4 billion but a significant jump from $75 million in the same period the prior year, the report noted. Transaction revenue alone jumped 37% quarter-over-quarter to $1 billion, driven by institutional trading activity and heightened crypto market participation.

Coinbase's Base network, launched in 2023, has become a critical growth engine, contributing to the firm's financial success. The platform now leads layer-2 networks in stablecoin adoption, with $4.6 billion in total value locked, according to DeFiLlama data referenced in the company update. Base's role in Coinbase's strategy extends beyond transaction efficiency; the company is exploring the introduction of a native token to further capitalize on its ecosystem. While CEO Brian Armstrong has emphasized that the project is "still in the early stages" and no timeline has been set, analysts from JPMorgan estimate that a Base token could unlock up to $34 billion in value for the company, with Coinbase potentially capturing $4 billion to $12 billion based on token supply allocation. This potential aligns with Coinbase's broader diversification into staking services and blockchain rewards, which generated $185 million in Q3.

The firm's subscription and services segment, which includes stablecoin-related revenue, saw a 43% year-over-year increase to $355 million, driven by the growth of Circle's USDC and other tokenized assets, the company noted. Coinbase's strategic focus on recurring revenue models, akin to Netflix's subscription approach, is gaining traction. The company's Coinbase One premium service, offering zero trading fees and enhanced staking rewards, generated $656 million in revenue in Q2 2025, highlighting its monetization potential, according to an NAI500 analysis. Additionally, Coinbase's custodial role for newly launched Bitcoin ETFs and its position as a gateway for dollar-cost averaging strategies further solidify its recurring revenue moat.

Partnerships and regulatory tailwinds are also bolstering Coinbase's position. A recent collaboration with Apollo Global Management aims to develop stablecoin credit strategies targeting the projected $3 trillion ecosystem by 2030, as reported in a GuruFocus report. Meanwhile, the Trump administration's regulatory framework for stablecoins has provided clarity, with Coinbase emphasizing its intent to lead in the "crypto rails" powering global GDP. However, the company faces challenges, including short-term profit pressures from the Deribit acquisition and the need to navigate U.S. regulatory uncertainties around token classification noted by analysts.

Looking ahead, Coinbase's Q3 2024 results underscore its resilience in a volatile market. With Base's momentum, strategic token exploration, and expanding stablecoin operations, the firm is positioned to capitalize on both short-term trading growth and long-term on-chain innovation. As JPMorgan analysts highlight, the success of the Base token and continued integration of decentralized finance (DeFi) could redefine Coinbase's valuation trajectory, potentially transforming it into a cornerstone of the Web3 economy.