Coinbase to Significantly Benefit From $1.6B Transfer of MakerDAO's USDC, Analyst Says
A proposal to move the stablecoin assets was made by Coinbase in September and is nearing a final deadline.
Coinbase Global (COIN) will significantly benefit from the potential transfer of about $1.6 billion in USDC from MakerDAO to Coinbase Prime, Oppenheimer analyst Owen Lau said in a research note to clients.
A Maker Improvement Proposal submitted by Coinbase in September laid out how a chunk of USDC could be moved to Coinbase Prime for custody and rewards. “Coinbase is uniquely situated to offer a USDC Rewards Program to MakerDAO that meets this evaluative criteria,” according to the proposal.
Currently, 88% of the votes are in favor of the proposal, with a final deadline in three days. Lau sees the event as being “very likely” to be accepted by Maker.
Coinbase is one of the co-issuers of USDC, along with Circle. The transfer between Coinbase and MakerDAO is part of Maker’s ongoing effort to allocate about $4 billion in USDC from its treasury to institutional investors in order to diversify its balance sheet and earn some yield.
Earlier in October, Maker invested $500 million in U.S. treasuries and corporate bonds.
Lau wrote that the added USDC on Coinbase Prime would help the company gain assets and aid Coinbase’s ability to conduct similar proposals, while also potentially growing the total addressable market of USDC and boosting its revenue share. Oppenheimer rates Coinbase’s stock with an outperform and $107 price target. Shares were trading around $65.45 apiece in Friday’s session.
Coinbase said this week it would waive commission fees for USDC sales and purchases made in any fiat currency in a push to promote the wider global adoption of its stablecoin.
Analysts from JPMorgan recently estimated that Coinbase’s joint venture with USDC issuer Circle alone could contribute about $700 million of incremental revenue for the company next year.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.