JPMorgan: Coinbase ties to Circle, USDC could add $60 billion benefit to shareholders

Coinbase, the largest US crypto exchange, has benefited from its ties with stablecoin giant Circle in ways investors may be underestimating, JPMorgan analysts said in a note Tuesday. They wrote:

“We see USDC economics as particularly attractive to Coinbase. We see attractive economics driven by both a high payout on Coinbase USDC on-platform, and essentially 100% margins for Coinbase’s share of Circle Reserve Fund economics for off-platform USDC. In 1Q25, Coinbase generated more in Circle distribution payments to Coinbase (~$300mn) than Circle generated in firmwide total net revenue (~$230mn), and we calculate Coinbase generated a 66% margin on its USDC income. Given Circle’s $50bn market capitalization, we see the value of Circle economics to Coinbase shareholders at $55-$60bn.”

Circle’s USDC has a $63.7 billion market cap and is the second-largest stablecoin. 

Coinbase has a minority interest in Circle and owns $1.6 billion of Circle stock. It also shares any Circle Reserve Fund income “not allocated to partners 50/50 with Circle.”

This alone brought in $170 million in the first quarter, which JPM analysts deemed “particularly attractive revenue for Coinbase as it requires little, if any, incremental investment by Coinbase.”

Of course, this comes against the backdrop of the GENIUS Act, which establishes a regulatory framework for stablecoins, being signed into law. This is the first major crypto regulation in the US and is a landmark moment for the $265.8 billion stablecoin space and the crypto ecosystem in general.

Coinbase is set to report second-quarter earnings on July 31.