USDC is Paying Off Big for Coinbase, And JPMorgan Thinks It’s Just the Beginning

Edyme

July 29, 2025

Outside of the exchange, Coinbase also benefits from the Circle Reserve Fund, splitting profits 50/50 with Circle...

Coinbase’s long-standing partnership with Circle is proving to be more than just a collaboration in the stablecoin market, it’s turning into a significant revenue driver for the exchange.

According to a recent JPMorgan report, the USDC ecosystem is quietly delivering billions in value for Coinbase shareholders, even as market attention often focuses elsewhere in the crypto space.

USDC economics: a growing piece of coinbase’s business

The Wall Street bank estimates that the total value tied to Coinbase’s relationship with Circle could fall somewhere between $55 billion and $60 billion, hinting that investors may be undervaluing this connection.

A big factor behind this is Coinbase’s partial ownership in Circle, with 8.5 million shares worth around $1.6 billion as of July 25. But that’s just the equity side of the story.

The real numbers, JPMorgan notes, are coming from USDC-linked revenue streams.

In Q1 2025, Coinbase reportedly earned around $300 million in distribution payments from Circle, even surpassing Circle’s own total net revenue of $230 million during the same period. Much of this comes from the stablecoin’s growing adoption and the interest generated from reserves backing USDC.

On its platform alone, Coinbase had roughly $13 billion in USDC balances by the end of the first quarter, producing an estimated $125 million in revenue at margins between 20% and 25%.

Outside of the exchange, Coinbase also benefits from the Circle Reserve Fund, splitting profits 50/50 with Circle, a deal that added another $170 million last quarter, almost entirely at near-100% margins.

Market outlook remains neutral

Despite these impressive numbers, JPMorgan is keeping its neutral rating on Coinbase stock, setting a price target of $404 per share, with trading sitting close to $381 on Tuesday morning.

The bank’s analysis highlights that while trading fees often grab headlines, the quieter, high-margin stablecoin economics could be a cornerstone of Coinbase’s long-term growth.

USDC continues to hold its spot as one of the most widely used stablecoins globally, and with regulatory clarity around stablecoins slowly improving, this could boost future earnings for both Circle and Coinbase.

For now, JPMorgan’s findings show what many in the industry have suspected: stablecoin infrastructure isn’t just about payments, it’s becoming a significant revenue engine for major exchanges.