JPMorgan Upgrades Coinbase to Overweight, Citing Base's $34B Value Potential

JPMorgan Chase & Co. has upgraded Coinbase Global Inc. to "overweight" from "neutral," raising its price target to $404 per share, a move analysts say reflects the crypto exchange's untapped potential in its Base layer-2 blockchain and USDC monetization strategies. The bank estimates the Base token could unlock $12 billion to $34 billion in value for Coinbase, with up to $12 billion potentially accruing to the company, according to a Coindesk report.

The upgrade, announced Oct. 24, comes as Coinbase explores a token for its Base network, launched in August 2023. JPMorgan analysts highlighted that a Base token could equitize the network's growth, which has amassed over $5 billion in total value locked and processes 9 million daily transactions, The Block reported. The token's economics, they said, could create a $12 billion to $34 billion market cap, with Coinbase retaining 40% of the supply—translating to $4 billion to $12 billion in equity value, the analysts added.

In parallel, Coinbase's strategy to segment USDC yield rewards for Coinbase One subscribers is expected to boost annual earnings by $1 per share. By limiting high-yield returns to premium users, the exchange could retain $374 million in annual revenue previously distributed to all customers, the Coindesk report said. JPMorgan also cited Coinbase's integration of a decentralized exchange (DEX) aggregator within the Base app as a hedge against competition from decentralized platforms, which now account for 25% of spot crypto trading volume, according to Yahoo Finance.

Coinbase shares rose over 9% to $353 in early trading, with the stock up 42% year-to-date. The upgrade follows a broader stabilization in market share between centralized and decentralized exchanges, with JPMorgan valuing Coinbase at 50 times 2027 earnings projections, Cryptodnes reported. Analysts noted that Coinbase's diversified model—spanning brokerage, market making, and custody—positions it to maintain profitability amid potential fee pressures, JPMorgan said.

The bank's bullish outlook aligns with Coinbase CEO Brian Armstrong's recent confirmation that Base is "exploring" a token but has no definitive plans, The Block reported. Armstrong emphasized the token could accelerate decentralization and expand opportunities for developers, while JPMorgan analysts argued the move would spur ecosystem growth and long-term infrastructure development.

Coinbase is scheduled to report third-quarter earnings on Oct. 30, with analysts expecting $1.06 in earnings per share and $1.74 billion in revenue, Coinotag reported. The company's recent initiatives, including a $25 million investment to revive a crypto-focused podcast and plans for private transactions on Base, underscore its focus on community engagement and privacy, according to Cointelegraph.