Coinbase Reports Strong Q3 Results Driven by Crypto Market Activity
Coinbase Global (COIN) has reported a substantial increase in both profit and revenue for the third quarter, largely attributed to heightened trading activity and revenue generated by the cryptocurrency markets. The crypto exchange recorded net revenue of $1.79 billion, a significant rise from $1.13 billion during the same quarter last year. Trading volume for the quarter reached $295 billion, up from $185 billion in the previous year. The company’s profits surged to $433 million, translating to $1.50 per share, compared to $75.5 million in the third quarter of last year. Since the beginning of 2025, Coinbase’s stock has appreciated by 34%, outpacing the largest cryptocurrency, Bitcoin (BTC-USD), which reached an all-time high during this period. Following the earnings announcement, Coinbase’s stock experienced a 2.6% increase in after-hours trading.
Transaction Fees and Subscription Revenue Surge
Transaction revenue fees on Coinbase’s platform soared by 83% year-over-year, reaching $1 billion. Additionally, the company’s subscription and services segment, which includes earnings from stablecoins, staking, and various financing fees, climbed 34%, setting a new record at $747 million. Alesia Haas, the CFO of Coinbase, highlighted that the growth in trading activity was largely driven by more sophisticated traders. She noted, “We introduced a new high-touch service that has gained significant traction, allowing us to retain and expand our base of advanced traders on our platform.”
Regulatory Developments and Future Outlook
This year, the Trump administration’s engagement with the cryptocurrency sector has opened new legal and regulatory avenues for both Coinbase and the wider industry, including the implementation of the first federal regulations governing stablecoins in July. Stablecoins are digital currencies tied to government-backed currencies or commodities such as gold. The trend in Washington is expected to continue, with Coinbase expressing optimism about the future. In a letter to shareholders, the company stated, “We are accelerating payments through stablecoin adoption, which we expect to sustain due to favorable policy changes and the ongoing interest from financial institutions and corporations for payment and treasury solutions.” They believe that as regulatory clarity improves, cryptocurrency infrastructure will increasingly contribute to the global economy, positioning Coinbase at the forefront.
Strategic Acquisitions and Institutional Growth
Coinbase has also made several strategic acquisitions this year, including a $2.9 billion purchase of the prominent crypto derivatives exchange Deribit in May, followed by the acquisition of blockchain capital raising platform Echo for $375 million earlier this month. Haas noted that institutional trading revenues surged over 120% during the quarter, benefitting from the Deribit acquisition. The company’s emphasis on stablecoins has further propelled the growth of USDC (USDC-USD), the second-largest stablecoin issued by Circle (CRCL). Coinbase earned $354 million in revenue from stablecoin activities, and the average USDC held across its platforms hit a record high of over $15 billion.
Partnerships with Traditional Financial Institutions
Coinbase is actively pursuing partnerships with traditional financial institutions to expand its institutional services, aiming to develop a crypto prime brokerage that offers custody, trading, execution, financing, and a suite of cryptocurrency services for institutions to provide to their clients. The company has forged agreements with major U.S. banks, including a credit card partnership with JPMorgan Chase (JPM), a crypto-as-a-service arrangement with PNC Financial Services Group (PNC), and a collaboration with Citigroup (C) for crypto payments solutions. Earlier this month, Coinbase submitted an application for a national trust bank charter with the Office of the Comptroller to bolster these initiatives.
