Coinbase stock’s 9.8% surge on JPMorgan upgrade explained

Key Takeaways

What market potential does the Base token launch offer?

JPMorgan estimates a $12–$34 billion market opportunity, with Coinbase potentially capturing $4–$12 billion.

How could Coinbase expand margins through USDC rewards?

By limiting interest rewards mostly to Coinbase One subscribers, it potentially adds $374 million in annual earnings.

Coinbase’s stock surged to $354.46, marking a 9.82% jump, at press time, after JPMorgan Chase upgraded the cryptocurrency exchange.

The boost comes as analysts highlight new monetization opportunities tied to Coinbase’s Base layer-2 blockchain and its USDC payout strategy. 

What’s behind the stock surge?

JPMorgan noted that Coinbase is actively seeking ways to leverage its growing platform.

One major opportunity is the anticipated launch of a Base token, which could open up a $12–$34 billion market. Coinbase may capture between $4–$12 billion of that value.

Analysts expect the token to be distributed primarily to developers, validators, and the broader Base community, aligning with Coinbase’s strategy to drive ecosystem growth.

JPMorgan highlighted a potential margin boost for Coinbase through changes to its USDC rewards program.

Under the proposed adjustments, interest rewards would be scaled back for most users. Instead, they would be offered primarily to Coinbase One subscribers.

If implemented, these changes could generate an estimated $374 million in additional annual earnings, based on current USDC yields and interest rates.

The most anticipated Coinbase’s Q3 earnings report

Investors are closely watching Coinbase’s Q3 earnings report, set to be realeased on the 30th of October.

Analysts at Zacks Investment Research project earnings of $1.06 per share, marking a 71% year-over-year increase. Revenue is expected to reach $1.74 billion, up 44.1% from the same quarter last year.

This comes after a mixed Q2, where Coinbase missed earnings expectations but achieved key operational milestones, including rising stablecoin balances and increased stablecoin-related revenue.

Looking ahead, Coinbase’s emphasis on its subscription and services segment is expected to generate $665 million to $745 million this quarter.

This shift underscores the company’s strategy to diversify its revenue beyond trading fees.

What’s more?

On the strategic front, Coinbase’s $375 million acquisition of digital asset investment platform Echo signals a renewed push into crypto fundraising.

The deal recalls the early ICO boom, when token sales raised billions and introduced mainstream investors to cryptocurrencies.

While ICOs largely vanished after regulatory crackdowns in 2018, the Echo acquisition suggests Coinbase is aiming to revive elements of that market in a more regulated and compliant environment.

All this coincided with Coinbase’s push to become a primary financial account, positioning crypto as a mainstream banking alternative, offering strong rewards and fast services, though security and support challenges remain.

Strategic partnerships, like the one with Google, further strengthen its path toward broader adoption.