Here’s Why the Base Token is a Big Deal for Coinbase Stock

The Coinbase stock price has moved sideways in the past month after it published a weak earnings report. It performed similarly to Bitcoin and most altcoins in this period. COIN shares may soon have a major catalyst as the company prepares to launch the Base Blockchain token.

Base Blockchain Token Launch to Boost Coinbase Stock

In a statement on Monday, Jesse Pollack, the executive who heads the Base Blockchain, noted that the company was considering launching its token at a later date.

He noted that the date and other details of the launch are still under discussion. It confirmed that more information would come out at a later date.

What is important, however, is that the company has confirmed that a Base token is coming, either this year or in 2026. Such a move would have major benefits for Coinbase, which launched Base in 2023.

A major challenge that Coinbase has experienced with Base is that it is not a very profitable platform despite its popularity among developers and users. According to DeFi Llama, the network made just $6 million in revenue in August. It’s much lower than the all-time high of $16.7 million in March last year.

Estimating Potential Base Valuation

By launching the BASE token, Coinbase will be in a good position to establish the real value of the layer-2 platform. One way to estimate the real value is to compare it with other popular layer-2 networks like Arbitrum, Polygon, and Polygon.

Data shows that Base is much bigger than these layer-2 networks in so many ways. For example, Base has a total value locked of $6 billion, much higher than Arbitrum’s $4.5 billion and Polygon’s $1.3 billion.

Similarly, Base has more stablecoins in its network than the two. Its stablecoin supply stands at over $4.5 billion. That’s much higher than Arbitrum’s $3.59 billion and Polygon’s $3.04 billion.

The other notable metric is that Base is bigger than the two in terms of decentralized exchange (DEX) volume.

Protocols in the network handled over $47.8 billion in the last 30 days, making it the fourth-biggest chain after Solana, Ethereum, and BNB Chain. Arbitrum and Polygon handled $2 billion and $4.5 billion in volume.

Therefore, based on these numbers and considering that Base is backed by one of the biggest players in the crypto industry, it is likely that it will have a higher valuation than the two.

Arbitrum has a market capitalization of $2.61 billion and a fully diluted valuation of $4.9 billion. Polygon, on the other hand, has a market capitalization of $2.7 billion and the same FDV.

As such, as a bigger layer-2 network, the Base Blockchain will likely have a fully diluted valuation of over $5 billion. That’s based on what Arbitrum is valued at. Most importantly, Base is fully owned by Coinbase. It means that most of this value would accrue to the company.

The Base token launch comes as the company is working to diversify its revenue sources away from transactions.

COIN Stock Price Technical Analysis

The daily timeframe chart shows that the Coinbase stock price has moved sideways in the past few weeks. In this period, it has constantly remained above the important support at the 100-day Exponential Moving Average (EMA).

Most importantly, it has formed an island reversal pattern, which is mostly followed by a bullish reversal. This pattern occurs after an asset makes a bearish breakout, followed by a period of consolidation lasting several weeks or months.

In most cases, the pattern normally results in a strong bullish breakout, which, in this case, may see the stock retest the important resistance level at $400. That is about 23% above the current level. A drop below the lower side of the island would invalidate the bullish forecast.

The token launch may coincide with a period when the Federal Reserve is cutting interest rates. That could boost most cryptocurrencies and platforms in the industry.