Coinbase commercial arrangement could be positive, says Barclays

Barclays analyst Benjamin Budish keeps an Underweight rating on Coinbase with a $70 price target after the company announced Centre is winding down and that it is taking an equity stake in Circle. A new commercial arrangement, in which issuance-related income will be shared equally, could be low-single-digit accretive to fiscal 2024 revenue, and high-single-digit to EBITDA if the total share gets to 50%, the analyst tells investors in a research note. The updated agreement means that not only will Coinbase receive the revenues it would have under the previous agreement pertaining to USD coin held on its platform, but will also receive an equal share of interest income generated from the broader distribution and usage of USD coin, rather than a proportional share based on distribution and usage, says Barclays.