JPMorgan's $34 Billion Estimate for Coinbase's Base Token

JPMorgan analysts predict that the potential token launch for Coinbase's Base network could add $34 billion in additional value to the company. The U.S. investment bank aims to set a price target of $404 for Coinbase shares.

The report noted that Coinbase has improved its performance by developing new revenue models and reducing risks. JPMorgan highlighted Coinbase's strong revenue potential due to the Base ecosystem and the USDC yield program. Base, an Ethereum-based Layer 2 network, was launched in August 2023 and is now one of the most active networks in the sector, with over $5 billion in total value locked (TVL) and over 9 million daily transactions.

Based on this growth momentum, JPMorgan stated that the market capitalization of the Base token could range from $12 billion to $34 billion. Furthermore, it indicated that Coinbase has the potential to gain a direct equity value between $4 billion and $12 billion by holding 40% of the supply.

Coinbase executives have previously announced that they are exploring the idea of a native Base token. Base's founder Jesse Pollak emphasized that the token would accelerate the network's decentralization process, while CEO Brian Armstrong confirmed the possibility by stating, "there is no concrete plan yet."

JPMorgan stated that Coinbase could offer USDC interest income only to Coinbase One members, which could provide the company with approximately $374 million in additional annual revenue. Additionally, adding a decentralized exchange (DEX) aggregator to the Base application was considered an important strategy against the increase in decentralized trading volume.

Currently, Coinbase shares are trading around $355. The $404 price target set by JPMorgan indicates that the shares may trend close to the $430 peak reached after the GENIUS Act was passed in July.