Author: Artemis

Translation: Deep Tide TechFlow

Deep Tide Overview: Wall Street treats Coinbase as a brokerage that follows the ups and downs of Bitcoin, valuing it at half of Circle's worth. But data shows that 92.8% of AI agent payments occur on Base, and 99.8% are settled in USDC—Coinbase has already become the underlying infrastructure for AI native finance, not just an exchange. If McKinsey’s forecast of a $5 trillion AI agent business by 2030 is even half realized, the valuation logic for Coinbase needs to be rewritten.

The bullish logic for Coinbase becoming a $300 billion company by 2031

Core Viewpoint: Most people see Coinbase as a cryptocurrency broker that fluctuates with Bitcoin and crypto trading volumes. This narrow perspective overlooks Coinbase's long-term upside potential—in a world where the stablecoin supply reaches $3 trillion and the AI agent business scales to $5 trillion by 2031, Coinbase, as a co-creator of USDC (with a revenue-sharing agreement with Circle) and the creator of x402 and Base (the current main venue for AI agent business), will gain enormous value.

Introduction

Artemis is a digital finance research company focused on on-chain data. We have helped McKinsey estimate the real volume of stablecoin payments, extensively discussing AI agent business and the digital finance landscape in 2030. As crypto merges with AI, Coinbase will no longer just be a crypto exchange but will become the settlement layer, distribution layer, and business layer of AI native finance.

Most people see Coinbase as a cyclical crypto broker, fluctuating with crypto trading volumes.

Unsurprisingly, Coinbase's performance is consistent with other brokers like IBKR, Robinhood, and Schwab.

Meanwhile, Circle, as a pure stablecoin growth bet, has achieved much higher valuation multiples (103.9 times NTM P/E ratio).

Coinbase could become a $300 billion company by 2031 (6 times today's value, with a 35% CAGR), becoming a major winner in stablecoin and AI agent payments—not just a crypto exchange. See this link for the complete model.

Our core assumptions:

• The stablecoin supply will reach $3 trillion by 2031
• The AI agent business volume will reach $7.5 trillion by 2031
• Our assumptions about the core exchange business are in line with the market—transaction revenue around $6 billion by 2028

The overlooked fact by the market is that Coinbase benefits and excels from two generational tailwinds:

1. The rise of stablecoins and global demand for digital dollars. U.S. Treasury Secretary Scott Bessent predicts that by 2030, the stablecoin supply will reach $3 trillion (a tenfold increase from today). Bain & Company estimates the supply will grow twelvefold to $3.8 trillion by 2030.

2. The rise of AI agent business. McKinsey predicts that the global AI agent business will grow to $3-$5 trillion by 2030, and we forecast that one-third of the business volume will be settled on-chain using AI agent payment protocols such as x402 and MPP. We currently see rapid growth of AI agent payments on-chain:

Coinbase evidently benefits from these two tailwinds, as the largest and most regulated distributor of USDC, and gains value from being the first network for AI agent payments.

Even if institutions remain skeptical about DeFi and believe crypto is "dead," Coinbase will still win—not because of crypto and trading volumes, but because it becomes the most trusted and dominant platform for stablecoin and AI agent payment infrastructure.

Why Coinbase Wins from Stablecoins

The market does not understand that Coinbase is a clear winner in the growth of stablecoins—even as crypto trading volumes decline, the usage of stablecoins has historically shown a rising trend.

The USDC distribution agreement is an asset of Coinbase, not Circle. The revenue share paid to Coinbase by Circle has risen from 32% in 2022 to about 50% over the past two years. The structural reasons are straightforward: Coinbase earns approximately a 100% yield on USDC it holds within its products and receives a significant share from the off-platform balances under the waterfall mechanism from the Payment Base. As the scale of Coinbase's distribution grows (with an average of $17.8 billion in USDC held in Coinbase products by Q4 2025, reaching a historical high), its waterfall share also increases.

From an investor's perspective, this agreement is more akin to Coinbase outsourcing regulatory and reserve management work to Circle rather than Circle paying Coinbase for distribution. The cooperation agreement lasts for three years and automatically renews, provided three benchmarks are met (product, company, and distributor). Public documents show that if these benchmarks are met, "the Circle agreement cannot be terminated." The renewal mechanism is not a renegotiation cliff—but a continuation lock. For Circle, leaving means cutting off the largest single distribution channel for USDC. For Coinbase, an upward scenario (clear regulatory push for stablecoin payment scale, significant expansion of USDC's market value) will directly flow into the same contractual shares. The structure of this agreement continually solidifies Coinbase's position, regardless of who operates Circle.

The Future Growth of USDC

Outside of Coinbase, we also see many interesting use cases for USDC, especially in emerging protocols. We have observed significant increases in USDC supply in protocols such as Polymarket, Hyperliquid, MakerDAO over the past two years. As new financial use cases emerge on blockchain platforms, USDC continues to be used in these protocols.

Coinbase is well-positioned to capture the next wave of stablecoin use cases—payments. Types of payments via card rails (B2B, B2C) have increased significantly over the past year, with USDC steadily gaining share in these transactions.

Observing address-to-address transfers of USDC (a proxy metric for such transactions), it can be seen that USDC is gaining share over USDT.

Did the Market Misread the CLARITY Act?

The Digital Asset Market Clarity Act (H.R. 3633), commonly referred to as the "CLARITY Act," passed the U.S. House of Representatives with bipartisan support of 294-134 on July 17, 2025. This act will establish a comprehensive regulatory framework for digital assets, apart from payment stablecoins. For Coinbase, the CLARITY Act represents the most significant pending U.S. legislation regarding the regulatory environment for the company, establishing a fundamentally complete federal regulatory framework for the digital assets ecosystem in which Coinbase operates.

The relevance of the CLARITY Act to Coinbase's stablecoin economics is also greater than people generally realize. The revenue streams generated from the distribution and reserve share arrangements between Coinbase and Circle could, under current interest rate assumptions, rival the economic returns at the issuer level of Circle itself, while Coinbase's USDC rewards program contributes another line whose ultimate scale depends on how the Tillis-Alsobrooks compromise is finally drafted. The market underestimates the scale and durability of these revenue lines related to stablecoins, viewing them as appendages to exchange business rather than the core economic infrastructure itself. The CLARITY Act reinforces this argument by formalizing a broader regulatory framework for the clearing, settlement, and circulation of stablecoins—and clarifies the registered intermediary through which stablecoin institutional liquidity flows. It redefines Coinbase's stablecoin business as an application layer within a regulated and rapidly institutionalizing system, rather than an independent consumer product line whose value fluctuates with retail token trading volumes.

Why Coinbase Wins in AI Agent Payments

Most investors consider Stripe (valued at $159 billion as of February 2026) and Tempo as clear winners in AI agent business, but on-chain data shows otherwise: 92.8% of real AI agent payments occur on Base, with 99.8% settled in USDC.

Of all AI agent payment volumes, over 99.8% occurs on x402—this is the open payment protocol pioneered by Coinbase.

AI agents are transitioning from assistants solving queries to systems representing users in transactions, buying APIs, data endpoints, compute power, reasoning, and services in fractions of a unit economy and machine speed.

The existing card rails were not designed for this. A typical card transaction incurs a fixed cost of about $0.03 to $0.04 before interchange fees, making a $0.003 API call economically unfeasible—off by two orders of magnitude. Stablecoins settled on high-throughput L2s clear in a fraction of a cent within seconds, without the need for human intervention to establish billing relationships.

McKinsey predicts that global AI agent business sales will reach $3-$5 trillion by 2030. Gartner estimates that by 2028, AI agents will mediate over $15 trillion in B2B purchases. Both figures are directional and should be viewed as such; however, it is not speculative that if either of these is realized, it structurally favors stablecoin rails, with USDC already being the default choice, directly benefiting Coinbase.

Data Scorecard

The x402 standard is a HTTP-native micro-payment protocol co-developed by Coinbase (now managed by the Linux Foundation), which has become the leading open protocol for AI agents to initiate payments. Since October 2025, x402 has processed over 180 million AI agent payments, moving $47.5 million in AI agent spending among over 5,000 merchants selling to AI agents.

When merchants make their services available for AI agents to consume, Coinbase's L2 and USDC are already the default payment rails. Additionally, Agentic.Market provides a pathway for Coinbase to own resource discovery. If AI agents utilize it to find, evaluate, and route to x402 services, value is gained not only through the settlement in Base and the volume of USDC but also through Coinbase's market position as a coordinator of transactions between AI agents and services.

How Coinbase Monetizes

Coinbase captures the economics of AI agent payments through four composite lines centered around the stablecoin pillar: USDC float income, Base settlement, CDP/AgentKit monetization, and Agentic.Market distribution.

USDC reserve yield. Coinbase's highest upside potential revenue line is not transaction fees, but float income. AI agent wallets need to maintain a pre-deposited balance to authorize autonomous spending, pay for APIs, cover usage-based services, and settle machine-to-machine commerce in real-time. As AI agents become economic actors, the USDC balance held in the wallets Coinbase controls becomes a recurring, income-generating deposit. Every dollar of USDC held by an AI agent generates reserve income, regardless of how fast that dollar circulates.

Base sequencer economics. Every transaction settled on Base through x402 or MPP becomes a sequenced transaction that can generate priority fees. This line expands with transaction volume rather than just payment volume, which is important as AI agent business may occur more frequently and with smaller tickets than human business. In other words, the sequencer fees may be the smallest part of the upside, as transaction costs tend to decrease over time.

CDP, AgentKit, and facilitator monetization. Coinbase can monetize the developer layer that enables AI agents to hold wallets, manage permissions, sponsor gas, settle x402 payments, and interact with paid services. This includes facilitator fees for x402 transactions, wallet infrastructure, gasless transactions, key management, policy control, and enterprise-level developer tools. If CDP becomes the default infrastructure stack for AI agent payments, Coinbase can earn platform revenue even if the ultimate payment value is low.

Scalable Upside Potential

We assume that by 2030, the annual scale of AI agent business will be $5 trillion. Most of this will still be routed through card, ACH, bank payment, and account-to-account rails, especially for large consumer and corporate purchases. However, machine-native, high-frequency, cross-border, API-based commerce will disproportionately use stablecoins and payment standards such as x402 and MPP.

In the bullish scenario, about 20% of AI agent business settles through stablecoin rails, implying an annual stablecoin-based AI agent payment volume of $1.0 to $1.5 trillion. An illustrative bullish scenario income calculation is as follows:

• USDC float: $200 billion average AI agent USDC balance × 4% reserve yield × 50% Coinbase attributable economics = $4 billion
• CDP/AgentKit/facilitators/Agentic.Market: developer subscriptions, wallet infrastructure, x402 facilitation, market routing, provider analysis, and distribution fees = $750 million
• Base sequencer: $250-$300 billion AI agent payment volume on Base, hundreds of billions of transactions, with low per-transaction economics = $250 million

This points to approximately $4.25 billion in annual Coinbase attributable AI agent revenue. The important conclusion is that if Coinbase becomes the operating account, developer platform, discovery layer, and settlement rail for autonomous commerce, true value will accumulate, and they have already made significant progress in this regard over the past few months.

Why Coinbase and USDC Win

Coinbase's advantage lies in its control over the four mutually enhancing layers of the AI agent payment stack: USDC float, Base settlement, CDP/AgentKit infrastructure, and Agentic.Market discovery.

USDC has already become the default settlement asset, meaning builders first integrate it as it has the deepest tooling, liquidity, and developer support. Therefore, Base benefits as the natural settlement chain for USDC native AI agent payments, with low developer friction and growing facilitator coverage. CDP and AgentKit sit at a higher layer, offering developers the wallets, key management, gas sponsorship, and payment infrastructure needed for AI agents to be economically active. Finally, Agentic.Market can become the discovery and routing layer for AI agents to find, compare, and consume services supporting x402. Competitors entering this market need to replicate liquidity, settlement, developer infrastructure, and distribution simultaneously—while each new AI agent, merchant, and service makes the existing Coinbase stack harder to replace.

Conclusion

The market sees Coinbase as a crypto exchange, overlooking that they are building an AI native finance platform. Global leaders predict a $3 trillion supply of stablecoins and a $5 trillion AI agent business by 2030, while stablecoins have already decoupled from crypto prices. Coinbase has positioned itself to become the winner in that world and shows early leadership. x402, USDC, and Base have become the de facto standard stack for AI agent business, with each layer exceeding 90% share against competitors. Coinbase is uniquely positioned, having developed Base, incubated x402, and garnered favorable shares within USDC economics. Mispricing has three legs. The Circle agreement structure is a continuation lock rather than a renewable contract, implying that the stablecoin revenue line is durable rather than risky. The CLARITY Act formalized the regulated infrastructure layer Coinbase has been operating, reclassifying the business from a consumer product to a core market pipeline. The four-layer AI agent stack (USDC, Base, CDP, Agentic.Market) self-reinforces, making each new AI agent and merchant more difficult to attack the moat. Coinbase's trading should align more with the infrastructure benchmarking group than with the brokerage group. We believe Coinbase will become a $300 billion company through these generational tailwinds, with most of its revenue coming from subscription and service lines like stablecoins and AI agent business.

Disclosure: This material is for informational purposes only and does not constitute investment advice, financial advice, trading advice, or any other form of advice. The views expressed are those of the author and should not be construed as a recommendation to buy, sell, or hold any assets. The author or affiliated entities may hold positions in the assets discussed. You should conduct your own research and consult appropriate financial professionals before making any investment decisions.