USDC and Circle are still undervalued. JP Morgan gave Coinbase a "neutral" rating.

JPMorgan has given Coinbase (COIN.US) a "neutral" rating with a new target price of $404. The bank states that Coinbase benefits from its investments in Circle and USDC, but investors may be underestimating the value of USDC and the Circle platform for Coinbase. JPMorgan has highlighted various benefits, including the appreciation of Coinbase's minority stake in Circle, and Coinbase using USDC's high returns as a cost-effective tool to acquire customers (JPMorgan estimates negative cost). However, the bank believes that the USDC economy is particularly attractive to Coinbase. The bank sees the economic attractiveness due to Coinbase's high returns on USDC on the platform and the fact that Coinbase's share of external USDC in the Circle reserve fund economy is essentially a 100% profit margin. In the first quarter of 2025, Coinbase's distribution payments from Circle were approximately $300 million more than Circle's net income within the company (around $2.3 billion). The bank calculates that Coinbase generates a 66% profit margin on its USDC revenue. With Circle's market value of $550 billion, JPMorgan believes that the Circle economy is valued between $5.5 billion and $6 billion for Coinbase shareholders.