Analysts See Strong Growth Potential in Coinbase’s Infrastructure Play

Cantor Fitzgerald has initiated coverage of Coinbase with an "Overweight" rating and a $245 price target, asserting that Wall Street is underestimating the strategic value of the crypto exchange’s evolving role in digital asset infrastructure. According to analysts Brett Knoblauch and Thomas Shinske, Coinbase is transitioning from being viewed as a cyclical crypto trading platform to a mission-critical layer in the broader crypto economy—driven largely by its stablecoin and layer-2 network initiatives.

Currently trading around $150, Coinbase (COIN) has seen its stock decline nearly 5% on the day and 12.5% over the past week, reflecting broader market volatility linked to geopolitical trade tensions. Despite short-term headwinds, Cantor Fitzgerald’s 84-page deep dive highlights two underappreciated growth engines: Coinbase’s financial stake in Circle’s USDC stablecoin and its growing influence through the Base layer-2 network.

👉 Discover how Coinbase is building the backbone of the next-gen financial system.

Stablecoin Revenue: A Silent Growth Engine

One of the most overlooked aspects of Coinbase’s business model is its revenue stream from USDC, the Ethereum-based stablecoin issued by Circle. With over $60 billion in circulation, USDC is the second-largest stablecoin by market cap, and Coinbase benefits directly from interest earned on reserves backing the token.

This income stems from a private commercial agreement between Coinbase and Circle, which grants Coinbase a significant share of interest generated from USDC reserves held on its platform. Starting in 2023, Coinbase began receiving “100% pass-through interest on USDC held on its platform,” while splitting income from off-platform holdings evenly with Circle.

In 2024, stablecoin-related revenue reached $910 million—up from $694 million the prior year—representing a fast-growing segment despite being overshadowed by trading fees, which still account for the majority of revenue at $3.9 billion annually.

As regulatory clarity emerges—particularly with proposed stablecoin legislation like the Stablecoin Transparency Act under discussion in Congress—analysts expect USDC adoption to accelerate. Even amid potential competition from thousands of new entrants, Cantor Fitzgerald believes Circle will retain dominance due to its strong compliance framework and institutional partnerships.

“If the stablecoin market exceeds $2 trillion by 2035, Coinbase’s stablecoin revenue could grow 5 to 10 times,” the report projects, depending on macroeconomic and bond market conditions.

Base: The Layer-2 Powerhouse Fueling Long-Term Value

Beyond stablecoins, another key driver identified by Cantor Fitzgerald is Base, Coinbase’s Ethereum layer-2 scaling solution launched in Q3 2023. Unlike traditional exchanges that only facilitate trading, Base allows developers to build decentralized applications (dApps), enabling users to interact with DeFi, NFTs, and social protocols at lower costs and faster speeds.

What sets Base apart is its seamless integration with Coinbase’s existing user base. Millions of Coinbase customers can move funds directly to Base with minimal friction—creating what analysts describe as a “flywheel effect”: more users attract more developers, leading to more dApps, increased transactions, and higher fee revenue.

Over the past 30 days alone, Base recorded 17 million active addresses, far surpassing Arbitrum’s 5.3 million, according to analytics platform GrowThePie. This rapid adoption signals strong product-market fit and positions Base as one of the most vibrant ecosystems in Web3.

Coinbase also operates the sequencer for Base—the node responsible for ordering and bundling transactions before posting them to Ethereum mainnet. In Q4 2024, this generated $68 million in “other transaction revenue,” nearly all attributed to sequencer fees—a number expected to grow as transaction volume increases.

Tokenization: The Next Frontier for Real-World Assets

Cantor Fitzgerald further emphasizes Coinbase’s potential in tokenization—the process of converting real-world assets like stocks, bonds, and real estate into digital tokens on blockchain networks.

While the SEC previously blocked Coinbase’s attempt to launch a tokenized securities platform in 2020, recent developments suggest renewed dialogue. In March 2025, CFO Alexia Haas confirmed that Coinbase is again engaging with regulators on tokenization efforts.

With global consulting firm McKinsey projecting that tokenized assets could reach $2 trillion by 2030, the long-term opportunity is substantial. As regulatory comfort grows, platforms like Base could become primary venues for issuing and trading tokenized equities, funds, and debt instruments.

👉 See how blockchain infrastructure is unlocking trillions in illiquid assets.

Market Mispricing Risk and Future Outlook

Despite these promising developments, Coinbase shares remain down 38% year-to-date, trading well below Cantor Fitzgerald’s $245 target. The analysts argue this reflects a market failure to recognize Coinbase’s transformation from a speculative trading venue into foundational crypto infrastructure.

“We view both [stablecoins and Base] as instrumental in changing the narrative surrounding COIN,” Knoblauch and Shinske wrote. “This isn’t just about trading cycles—it’s about owning core rails of the digital economy.”

As adoption of USDC expands and Base solidifies its position among top layer-2 networks, Coinbase stands to benefit from multiple compounding growth vectors: rising interest income, transaction fees, sequencer revenue, and future tokenization services.

Frequently Asked Questions

Q: Why did Cantor Fitzgerald give Coinbase an 'Overweight' rating?
A: Because they believe Wall Street underestimates Coinbase’s shift from a crypto exchange to a critical infrastructure provider via USDC and Base—two high-growth segments with long-term scalability.

Q: How does Coinbase make money from USDC?
A: Through a revenue-sharing agreement with Circle, where Coinbase earns interest on USDC reserves held on its platform—100% pass-through for on-platform holdings and 50% for off-platform reserves.

Q: What is Base and why is it important?
A: Base is Coinbase’s Ethereum layer-2 network that reduces transaction fees and speeds up processing. It integrates directly with Coinbase’s wallet and exchange, creating a powerful user-developer ecosystem.

Q: Is regulatory risk still a concern for Coinbase?
A: Yes, particularly around stablecoins and tokenization. However, proposed legislation may provide clarity, and Coinbase’s ongoing engagement with regulators suggests proactive compliance.

Q: How does Base generate revenue for Coinbase?
A: Primarily through sequencer fees—charged when processing transactions before they’re posted to Ethereum. Additional revenue comes from dApp activity and future monetization opportunities.

Q: Could tokenized assets really reach $2 trillion?
A: According to McKinsey, yes—by 2030. Early movers like Coinbase could capture significant market share if regulatory pathways open for blockchain-based securities.

👉 Explore the future of asset tokenization and decentralized finance today.

Conclusion: Beyond Trading Cycles

Coinbase is no longer just a gateway for buying Bitcoin. It's evolving into a multi-faceted infrastructure player with deep ties to stablecoins, layer-2 scaling, and real-world asset tokenization. While market sentiment remains cautious amid macro volatility, long-term investors may find compelling value in its diversified revenue streams and growing ecosystem influence.

As adoption accelerates and regulatory frameworks mature, Coinbase could emerge as one of the central pillars of the decentralized financial system—making today’s valuation appear conservative in hindsight.

Core Keywords: Coinbase stock, USDC stablecoin, Base layer-2 network, crypto infrastructure, tokenization of assets, Ethereum scaling, stablecoin revenue