Coinbase boosts USDC interest rates amid SEC scrutiny and declining supply By Investing.com

NEW YORK – Coinbase (NASDAQ:), a leading cryptocurrency exchange, has increased its USDC interest offering from an initial 2% to an impressive 6% APY for balances up to 250 000 $. For amounts exceeding this limit, the APY is reduced slightly to 5%. The move puts Coinbase at the forefront of competitive interest offerings, especially compared to riskier on-chain alternatives. However, not all users benefit from these high yields, with some reporting APYs as low as 0.58%, according to MV Capital.

The interest rate hike comes at a tumultuous time for Coinbase as it faces litigation from the SEC. The commission’s ongoing lawsuit against the exchange raises questions about the legality of its USDC rewards program under federal regulations. This legal challenge comes amid a notable decline in USDC supply, which recently fell below 25 billion for the first time since early last year. The decline in supply can be attributed in part to a temporary devaluation of USDC to $0.87 and a continued decline in market share following Circle’s admission of holding reserves in Silicon Valley Bank , now bankrupt.

Coinbase’s decision to raise interest rates is seen as a strategic move to attract and retain customers in an increasingly competitive market. However, it also highlights the dynamic and often unpredictable nature of the crypto sector, where regulatory pressures and market fluctuations can have a significant impact on business operations and consumer confidence.

InvestingPro Insights

In line with recent developments from Coinbase, InvestingPro data and advice provide interesting insights. With a market capitalization of $23.7 billion and volatile stock price movement, Coinbase has shown strong performance over the past three months and significant price rise over the past six months. The company’s revenue stands at $2,627.47 Million in Q3 2023, which is a remarkable figure despite the revenue growth of -47.88% during the same period.

InvestingPro Tips highlights that three analysts have revised their earnings upwards for the coming period, which could be a positive sign for potential investors. However, it is important to note that the company was not profitable in the last twelve months and analysts do not expect it to be profitable this year.

For those looking for additional information and advice, InvestingPro offers a wide range of additional tips, including over ten specifically for Coinbase. This Black Friday, InvestPro subscriptions are available at a discount of up to 55%, providing investors with an excellent opportunity to access a wealth of valuable financial information.

This article was generated with the support of AI and reviewed by an editor. For more information, consult our General Terms and Conditions.