CNBC reports that Coinbase continues to build out the backend infrastructure that banks currently use to provide crypto services, which could potentially reap significant long-term benefits.
Cryptopolitan earlier reported that Coinbase’s third-quarter revenue soared to $1.87 billion, beating expectations of $1.8 billion, driving a 9% rise in COIN stock by Friday’s close.
The company has partnered with Wall Street giants like JPMorgan, Citi, and PNC, all of which use Coinbase to provide access to cryptocurrencies within their platforms, calling this a fundamental build rather than a short-term revenue boost.
Banks Adopt Coinbase Infrastructure
In late July, Coinbase announced that it would integrate its institutional Crypto-as-a-Service platform into PNC, allowing customers to buy, hold, and sell cryptocurrencies directly from their existing banking environment.
Later that month, Coinbase announced multiple product offerings with JPMorgan. These services link your Chase bank account to your Coinbase wallet. Customers can transfer funds directly between the two. You can also transfer Chase Ultimate Rewards points to your Coinbase account.
Users can also fund their Coinbase account using a Chase credit card. Here, Coinbase moves from an exchange where people log in individually to an embedded layer within normal banking.
Bernstein analyst Gautam Chughani wrote that Coinbase is “quickly becoming the AWS of crypto financial infrastructure as major banks such as JPM, Citi, and PNC choose Coinbase as their crypto partner.”
Chhugani points to Amazon Web Services, the invisible backend behind most major technology products. This framework is used to explain Coinbase’s position as financial systems adopt blockchain rails for processing.
Analysts outline expected upside
Bernstein has an Outperform rating on Coinbase and a price target of $510, which represents a 55% upside.
Bernstein analysts wrote that Coinbase is “realizing the crypto dream that blockchain rails will reshape capital markets, banking, and payments.” They also said that the company’s path is not based on token price cycles, but on building a business that services the institutional financial system.
Barclays maintains an equal weight rating and a $357 price target, implying 8.7% upside. Barclays analysts said the company’s management expressed confidence in its aggressive development across payments, exchanges and capital formation.
Needham’s investment rating is “buy” and the price target is $400, suggesting upside room of 21.8%. Needham analysts wrote that management sees strong demand for stablecoin infrastructure. They said that while Coinbase continues to receive partnership commissions from large companies such as Citi and BlackRock, it is also seeing increased interest from smaller companies.
Rosenblatt’s investment rating is “buy” and the price target is $470, suggesting upside room of 43.1%. Rosenblatt analysts wrote that more than 1,000 companies currently use Coinbase for stablecoin payments, with another 1,000 on a waiting list.
They cite partnerships with Citi, Stripe, PayPal, Revolut, Webull, and Shopify as examples of how Coinbase is being used as an on-chain payment gateway for companies building crypto-based transaction flows.
