In a recent CNBC interview, Jeremy Allaire outlined dollar-priced fees, fast finality, and privacy for Arc, while pointing to rising USDC use in emerging markets.
This article was first published on The Bit Journal. The Coinbase revenue in the third quarter reached 1.9 billion dollars, up 26% from the previous one and also beating Wall Street expectations, set at 1.8 billion dollars. The strong earnings performance underlines the company’s growing diversification beyond trading fees and its strengthening market position amid a volatile crypto environment.
According to Yahoo Finance, analysts had expected $1.8 billion in revenue for Coinbase, up 50% from the year-ago period. The cryptocurrency exchange also posted earnings per share of $1.50 against a forecast of $1.10, with net income reaching $433 million down from $1.4 billion in Q2 but significantly higher than the $75 million reported in the same period last year.
Crypto Trading Surge Strengthens Coinbase Revenue
Anil Gupta, Coinbase’s vice president of investor relations, attributed the sequential decline in net income to “mark-to-market adjustments” related to the exchange’s holdings in stablecoin issuer Circle and its crypto portfolio. There’s non-cash noise in the net income number, Gupta said, adding that Coinbase revenue growth and profit margins remained robust. Overall, it was a great quarter for us.
Coinbase shares jumped in after-hour trading to 341 dollars, extending their year-to-date 33% gain. The stock reached its high at about 444 dollars in mid-July when crypto sector investor optimism went up.
Transaction-based income remained the company’s largest contributor to Coinbase revenue, totaling $1 billion a 37% quarter-over-quarter increase and well above the $573 million recorded a year ago. The surge in Q3 was powered by renewed market activity as BTC and ETH reached their all-time highs.
Along with an increase in trading volumes, the company’s stablecoin and staking services continued to power Coinbase revenue. The exchange recorded $355 million in revenue related to stablecoins, representing a 43% increase year-over-year, while posting $185 million from blockchain rewards.
USDC, the stablecoin issued by Circle and partially backed by Coinbase, reached an all-time high of a $74 billion market capitalization, while $15 billion in USDC held within Coinbase’s ecosystem further supported Coinbase revenue diversification.
Gupta also emphasized “really good progress” in the derivatives business of Coinbase, subsequent to its purchase of Deribit. The latter contributed materially to overall Coinbase revenue performance. It reported $840 billion in notional derivatives trading volume in Q3.
Stablecoin Adoption Surges Across Base Network
Meanwhile, the firm’s Ethereum layer-2 network, Base, was still a strong contributor to Coinbase revenue. In its earnings report, Coinbase attributed “higher average ETH prices and increased transaction volume” as key drivers of Base’s revenue growth.
Base has rapidly become a leading layer-2 network for stablecoin adoption, with the total value of dollar-pegged tokens hosted reaching $4.6 billion, according to DeFiLlama.
Recently, analysts at JPMorgan estimated that a possible Base token would add $12 billion to $34 billion in value to Coinbase and raised their price target to $404. Developments like this could significantly alter the long-term dynamics of Coinbase revenue streams.
Coinbase confirmed it has filed for a national bank trust charter, joining the ranks of such peers as Circle, Paxos, and Ripple. The move would position Coinbase to expand its revenue model into custodial and financial services under official banking regulations.
Brian Armstrong Reaffirms Coinbase Bitcoin Strategy
Besides that, Coinbase announced new plans to offer tokenized assets, which would further extend revenue sources for Coinbase. The initiative has also come a few months after similar announcements by Kraken and Robinhood.
Coinbase also added $299 million worth of Bitcoin in Q3 and has increased the fair value of its digital assets held for investment to $2.6 billion as of Sept. 30. CEO Brian Armstrong echoed the company’s long-term strategy on X:
“Coinbase is long Bitcoin and we keep buying more.”
Coinbase is long bitcoin.
Our holding increased by 2,772 BTC in Q3. And we keep buying more.
Given the ongoing momentum in derivatives trading, Base network growth, and stablecoin adoption, the revenue outlook for Coinbase looks strong going into the next quarter. Innovation, regulation, and diversification have all been balanced well by the company, making it one of the most resilient players in the global crypto industry.
Conclusion
Coinbase’s third-quarter results highlight the company’s strong financial resilience amid a recovering crypto market. With expanding revenue streams, growing Base network activity, and increasing Bitcoin holdings, Coinbase appears well-positioned for sustained growth. As innovation and regulation converge, the exchange continues to solidify its leadership in the global crypto ecosystem.
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Summary
Coinbase earned $1.9B in Q3, up 26% and above Wall Street forecasts.
Net income hit $433M, higher year-over-year despite valuation adjustments.
Stablecoin, trading, and derivatives revenue surged, driving overall growth.
Base network and token plans strengthened Coinbase’s long-term outlook.
Glossary Of Key Terms
Coinbase Revenue: Total earnings from Coinbase’s crypto operations.
Stablecoin: Cryptocurrency pegged to a stable asset like USD.
USDC: A popular stablecoin jointly managed by Coinbase and Circle.
Derivatives Trading: Contracts based on the value of crypto assets.
Base Network: Coinbase’s Ethereum layer-2 scaling solution.
Tokenized Assets: Real-world assets represented as blockchain tokens.
Circle: Stablecoin issuer and Coinbase’s USDC partner.
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