JPMorgan: The market capitalization of Base Token may reach $34 billion, while the value opportunity for CEX could be as high as $12 billion.

Analysts at JPMorgan predicted in a research report on Friday that the Layer-2 Blockchain Base could have a market capitalization of up to $34 billion if it launches a native token. The analysts believe that the launch of the Base token, along with better monetization of USDC rewards and a reduction in the threat from decentralized exchanges (DEXe), could raise the target price of the exchange's underlying stock by 14% to $404 before December 2026. Base currently leads Ethereum Layer-2 with a DeFi ecosystem size of $5 billion.

1. The Huge Valuation Potential and Strategic Opportunities of Base Token

Base is a Layer-2 Blockchain built by CEX. Although the leadership of CEX initially stated that this blockchain would not issue a native Token, analysts have pointed out that the attitude has changed in recent weeks, which brings huge potential profit space for the exchange.

market capitalization potential and exchange share value

• Ecosystem Scale: The current scale of the Base DeFi ecosystem has reached 5 billion USD, ranking sixth among all blockchains and first among Ethereum Layer-2 blockchains.
• Market Capitalization Prediction: JPMorgan analysts predict that if a Base Token is created, its market capitalization could range between 12 billion USD and 34 billion USD.
• CEX Opportunity: If it retains 40% of the token supply, it will bring a value opportunity of 4 billion to 12 billion USD for this cryptocurrency exchange.

DEX integration and Base sorting fee monetization

The exchange is actively integrating decentralized trading technology into its Base App, a move that not only expands its asset coverage but also paves the way for new profit models.

• Asset tradability: CEX has indicated that it will integrate DEX into its mobile application, allowing traders to buy and sell almost all on-chain crypto assets, rather than being limited to the current hundreds.
• Executive Insights: CEX executive Max Branzburg pointed out that millions of assets have been created and traded on DEX, but very few people are able to use these platforms effectively. After integration, users will trade all on-chain assets by default in their App.
• Monetization Expectations: JPMorgan analysts expect that CEX will monetize access to DEX through fees from the Base Sequencer.

2. Key Path to Enhance Profitability: USDC Rewards Optimization and DEX Threat Mitigation

In addition to the potential value of the Base Token, analysts believe that CEX can further enhance profitability by optimizing USDC rewards and leveraging the slowing growth of DEX.

USDC rewards liquidation strategy

• Strategy Adjustment: CEX can emulate Robinhood's Gold plan by reducing the rewards offered to most users and instead focusing on providing higher cash deposit yields to customers.
• Profit Increase: Analysts estimate that, based on the current interest rate level, eliminating the earnings of all users except customers could increase earnings per share by $1 per year (or $347 per year).

The threat of DEX is weakening

The threat of decentralized exchanges (DEX) to the revenue of centralized exchanges (CEX) is diminishing, bringing new benefits to them.

• Growth Stagnation: The rapid growth momentum of DEX has come to a halt this year.
• CEX Benefits: The exchange will benefit from its efforts to integrate DEX technology into the Base App, turning external threats into internal advantages.

3. Stock Target Price Forecast: Multiple Positive Factors Support $404

Analysts at Morgan Stanley believe that the combination of these three key driving factors is enough to support the strong growth of this exchange's stock.

• Core drivers: The potential massive valuation of the Base Token, optimization of USDC reward realization, and the weakening of DEX competition.
• Price target forecast: Analysts predict that by December 2026, its stock may rise by 14% to $404 per share.
• Market Significance: This prediction indicates that traditional financial giants have given high recognition to the exchange's leadership position in the crypto infrastructure and Layer-2 space.

Conclusion

The potential issuance of the Base Token has opened a door to hundreds of billions of dollars in value for the exchange. JPMorgan's optimistic analysis is not only an acknowledgment of the scale of the Base ecosystem but also a comprehensive affirmation of how CEX can enhance profitability through platform services, reward mechanisms, and Layer-2 innovations. The market will closely watch CEX's final decision regarding the issuance of the Base Token and how it can convert the threat from DEX into profitable opportunities for the platform.

Disclaimer: This article is for news information only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make decisions with caution.