According to CNBC, Coinbase’s stock rose 9% on Friday following strong third-quarter results that revealed $1.87 billion in revenue, beating analyst estimates of $1.8 billion. The cryptocurrency exchange’s growth was partially driven by emerging partnerships with major financial institutions including J.P. Morgan, Citi, and PNC. Bernstein analyst Gautam Chhugani described Coinbase as “fast becoming the AWS of Crypto financial infrastructure” in a note to clients, referencing Amazon’s dominant cloud division. The company’s institutional strategy includes integrating its Crypto-as-a-Service platform with PNC and developing multiple offerings with J.P. Morgan, including linking Chase bank accounts to Coinbase wallets and enabling transfers of Chase Ultimate Rewards points. This strategic shift toward banking infrastructure has prompted multiple Wall Street firms to issue bullish price targets ranging from $357 to $510 per share, representing potential upside of 8.7% to 55%.
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The AWS Analogy: More Than Just Hype
The comparison to Amazon Web Services isn’t merely financial hyperbole—it represents a fundamental business model transformation that could dramatically alter Coinbase’s valuation framework. Much like AWS began as internal infrastructure that Amazon later productized for external customers, Coinbase is leveraging its years of experience managing crypto operations to become a B2B infrastructure provider. This shift from direct-to-consumer trading to enterprise infrastructure mirrors the evolution we’ve seen in cloud computing, where the real value accrues to the platform providers rather than the end applications. The critical insight here is that infrastructure businesses typically command higher multiples than consumer-facing platforms due to their recurring revenue streams, higher switching costs, and more predictable growth patterns.
The Banking Partnership Calculus
What makes these banking partnerships particularly strategic is how they position Coinbase as the compliance and technology bridge between traditional finance and digital assets. Banks like J.P. Morgan and PNC Financial Services face regulatory complexity and technical challenges when venturing into crypto—Coinbase provides the regulatory compliance framework, security infrastructure, and technical expertise that would take years and hundreds of millions to build internally. This creates a powerful moat: once these integrations are established, the switching costs become substantial. The partnerships also provide Coinbase with diversified revenue streams that are less dependent on crypto market volatility—a crucial evolution for a company historically tied to trading volumes and asset prices.
The Hidden Gem: Stablecoin Infrastructure
While the banking partnerships grab headlines, the real sleeper opportunity may be in stablecoin infrastructure. With over 1,000 businesses already onboarded and another 1,000 on the waitlist, Coinbase is positioning itself as the plumbing for digital asset payments and settlements. This represents a massive TAM expansion beyond trading into cross-border payments, B2B settlements, and treasury management. The partnerships with Stripe, PayPal, and Shopify suggest Coinbase is building a comprehensive payment rail system that could eventually challenge traditional settlement networks. The strategic brilliance here is that stablecoin infrastructure generates fee revenue regardless of whether crypto prices are rising or falling—creating a natural hedge against the volatility that has historically plagued crypto businesses.
Navigating the Competitive Landscape
Despite the optimistic outlook, Coinbase faces significant competitive threats that the analyst community may be underestimating. Traditional financial infrastructure providers like Fidelity and Wall Street giants are developing their own crypto capabilities, while blockchain-native companies continue to innovate with decentralized solutions that could eventually bypass centralized intermediaries. The regulatory environment remains uncertain, and any major compliance failure could jeopardize these banking relationships. Additionally, the “AWS of crypto” analogy has limitations—unlike cloud computing where AWS dominates, crypto infrastructure remains fragmented across multiple chains and protocols, creating integration complexity that could slow adoption.
Strategic Implications Beyond Price Targets
The most significant implication of this infrastructure pivot extends beyond near-term stock performance. If successful, Coinbase could fundamentally reshape how traditional financial institutions interact with digital assets, becoming the default gateway much like AWS became the default cloud infrastructure provider. This positions the company to capture value across multiple layers of the financial stack—from custody and trading to payments and settlements. However, execution risk remains substantial. The company must balance its retail roots with its institutional ambitions while navigating an evolving regulatory landscape. The coming quarters will be critical in determining whether Coinbase can truly transcend its origins as a retail exchange to become the foundational infrastructure layer for the next generation of financial services.
