Coinbase, once known just as a big place to buy and sell crypto, is turning into a vital piece of the Ethereum network. That’s the word from a new report put out by research firm Bernstein this Monday. The report shows how Coinbase has grown its ties to Ethereum, mainly through its Base network and its large holdings of the digital currency, ETH.
Think of it this way: Coinbase isn’t just a shop for crypto anymore. It’s building its own express lane on the Ethereum highway. This lane is called Base. This Layer 2 chain handles a huge amount of traffic, processing over 9 million transactions every day. These transactions cover everything from stablecoins to financial apps and everyday consumer services. People pay for these transactions using ETH for gas fees. Because Coinbase runs this lane, acting as a transaction “sequencer,” it collects these fees. Bernstein figures this activity alone pulls in about $75 million in revenue each year for Coinbase.
The company has seen a nice bump from Ethereum’s recent success. Since June 5, the price of ETH has climbed a whopping 80%. This jump was partly due to Circle (CRCL) being listed on a major U.S. exchange. Also, more people are realizing that most stablecoins, which are a big part of the crypto world, use the Ethereum network. This surge in ETH’s value has been great for Coinbase, which has been pushing deeper into the Ethereum space.
Base Leads New Token Launches
Base has become the go-to network for launching brand new digital tokens. This is a big deal because all the assets on the Base network link directly to Coinbase’s main platform. This smooth connection has fired up trading activity, which means more brokerage fees for Coinbase, paid in ETH.
Coinbase also rolled out its Base App. This app is a simple wallet for regular people. It lets them buy, sell, hold, and send cryptocurrencies, including making payments with stablecoins. This app further connects Coinbase to Ethereum and its growing family of applications.
Big ETH Holdings and Trading Boost
Coinbase holds a significant amount of Ethereum itself. Its treasury has about 136,782 ETH, which is worth around $590 million. This makes Coinbase a direct winner when ETH’s price goes up. In its second-quarter earnings report, Coinbase pointed out that trading fees in July jumped 40% compared to the average for that quarter. Most of this growth came from more people trading ETH.
This overall growth shows how excited the market is about Ethereum. Coinbase now lists more than 250 tokens linked to Ethereum. Bernstein believes this wide range of assets and services puts Coinbase in a strong spot to keep making money as the Ethereum network expands.
Market Outlook
Bernstein is pretty bullish on Coinbase’s stock. They’ve given it an “outperform” rating and set a price target of $510. When Bernstein’s report came out, Coinbase shares were up 4%, trading at about $323. This shows that investors trust Coinbase’s plan and its close relationship with Ethereum.
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