Coinbase’s (COIN) Partnership with Circle (CRCL) and exposure to Circle’s USDC stableecoin generates considerable financial upside, both through capital assessment and high margin revenue streams, according to a new report from Wall Street Bank JPMorgan.
The total value of circular-related economy to coinbase shareholders is estimated at $ 55 to $ 60 billion, the bank said, suggesting that the market may be underestimating the strategic significance of the USDC ecosystem.
Crypto Exchange owns 8.5 million shares in the circle, valued at $ 1.6 billion per year. July 25. However, the larger story lies in USDC-related income, according to the report.
In the first quarter of this year alone, Coinbase served approx. $ 300 million in distribution payments from Circle, more than Circle’s total net sales of $ 230 million.
The bank estimated that Coinbase had $ 13 billion in USDC balance on platform at the end of the first quarter, generating $ 125 million in revenue at 20-25% margins.
Off-Platform, Coinbase Splits Circle Reserve Fund income 50/50, which draws $ 170 million last quarter by nearly 100% margin, the report added.
The bank has a neutral rating on the Coinbase share with a price target of $ 404. The shares were around $ 381 in the early trade on Tuesday.
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