Coinbase Global’s third-quarter earnings surpassed analysts’ expectations, attributed to increased trading volumes amid heightened volatility in digital assets. Following the announcement, the company’s shares rose over 3% in after-hours trading.
In July, digital asset prices experienced significant gains, spurred by favorable regulatory signals from U.S. President Donald Trump. This environment drew increased interest from institutional investors, propelling Bitcoin to new record highs. However, ensuing weak economic indicators in August stoked fears of a recession, prompting a sector-wide selloff as investors sought to liquidate riskier assets, including cryptocurrencies. Despite these fluctuations, Coinbase benefited from this volatility, as trading platforms typically do, capitalizing on heightened transaction activity.
Coinbase reported a transaction revenue of $1.05 billion for the quarter, significantly up from $572.5 million in the same period last year. The company also achieved a net income of $432.6 million, translating to $1.50 per share, a substantial increase from the prior year’s $75.5 million, or 28 cents per share. This figure exceeded analysts’ predictions, which estimated a profit of $1.06 per share.
Additionally, Coinbase finalized its acquisition of Deribit during the quarter, strengthening its foothold in the derivatives market—an area where it had previously struggled to establish dominance. Alesia Haas, the company’s finance chief, highlighted that Deribit commands a market-leading position in options trading, holding over 75% of the market share, although primarily outside of the U.S. This acquisition opens up avenues for expansion within the U.S. options market.
Revenue from Coinbase’s subscription and services segment, which encompasses various non-trading businesses, increased by 34.3% to $746.7 million in the third quarter. A significant portion of this revenue is derived from stablecoin holdings and related activities, with stablecoin revenue alone rising to $354.7 million from $246.9 million a year earlier.
Coinbase expressed optimism regarding the growing adoption of stablecoins, driven by supportive policy developments and increasing interest from financial institutions and corporate entities for payment functionalities. The GENIUS Act, passed earlier this year, aims to establish a regulatory framework for stablecoins, promoting broader acceptance within traditional financial circles.
Stock strategist David Bartosiak remarked that Coinbase stands in a position of financial strength, indicating it is “cash-rich and growth-ready,” suggesting a favorable outlook for the company as it navigates the evolving landscape of the cryptocurrency market.
