Coinbase’s slice of Circle’s revenue is about to drop, but that’s actually a good thing for the US-listed crypto exchange and for decentralised finance as a whole, according to analysts.
Why?
Because while Coinbase’s share of Circle’s total revenue may drop to 50% from 54% by 2027, it means that the usage of the firm’s USDC stablecoin will increase beyond crypto, according to Bernstein, a $781 billion wealth manager.
“Over the long term, as USDC adoption grows beyond crypto, we believe, share of crypto capital markets itself would go down, as payments, financial services, and traditional capital markets utility evolves,” Gautam Chhugani, and his two Bernstein colleagues wrote in a Wednesday research note.
And thanks to the partnership between Coinbase and Circle that splits off-exchange income 50-50 between the companies, more USDC usage translates to more income for the crypto exchange.
The comments highlight a growing trend of how the line between financial services firms and crypto is starting to blur as Wall Street increasingly muscles its way into digital assets.
Stablecoins surge
The prediction also comes at a crucial time for Circle.
DefiLlama data shows that the stablecoin market has skyrocketed to $253 billion. Bernstein expects it to grow by almost 1,500% over the next decade to be worth $4 trillion.
Circle and its rival Tether dominate the market, making up around 90% of the market together.
Bernstein also estimates that Circle’s revenue will grow by a compound annual growth rate of 47% by 2027. The stablecoin company enjoyed a blockbuster IPO just a few weeks ago.
That growth owes a lot to the pro-crypto bent of the Trump administration, which has put Washington at the cusp of passing landmark stablecoin legislation this year.
With those tailwinds, USDC could be on the verge of becoming a sanctioned pillar of the US financial system.
Coinbase and Circle
USDC and other stablecoins make up a key part of Coinbase’s business.
Stablecoin activity accounted for about 15%, or $300 million, of Coinbase’s total $2 billion revenue in the first quarter of 2025. That revenue stream helped cushion a 20% drop in trading income, Bernstein noted.
Coinbase and Circle have a revenue-sharing agreement that they renew every three years — with the next round due in 2026 — and Bernstein doesn’t expect it to go anywhere.
Under the current revenue-sharing agreement, Coinbase receives 100% of interest income from USDC held on its own platform, and splits off-platform income halfway with Circle.
And with the crypto exchange holding a 67% share of the US retail and institutional exchange market, it’s still a critical driver of Circle’s growth, said Bernstein analysts.
Its payments protocol, which lets merchants accept USDC via Stripe and Shopify integrations, now has over a million businesses.
The company also deployed it on its own blockchain, Base, which has processed more than $6.8 trillion in USDC transactions this year, according to Bernstein.
All of this is happening while Coinbase also broadens its scope in the crypto ecosystem — further nestling itself into the centre. In May, for instance, the company bought Deribit, a derivatives platform, for a whopping $2.9 billion.
That still doesn’t ensure success, especially while the decentralised finance space continues to drain market share from Coinbase and its ilk.
Circle has also inked deals with Binance, Coinbase’s biggest rival, which will also add to its total revenue.
As USDC matures into a fixture of global finance, the spoils will go to those who shape how — and where — it’s used.
