The cryptocurrency sector is currently experiencing a notable upswing, with significant implications for various market participants, particularly the U.S.-listed crypto exchange Coinbase. In a recent report, Coinbase announced that it generated $1.9 billion in total revenue for the third quarter of 2025, marking a 25% increase from the previous quarter.
Coinbase’s Co-Founder and CEO Brian Armstrong expressed optimism about the company’s performance during an update to investors, citing Q3 as a strong quarter driven by solid financial outcomes and a commitment to innovative product development. Central to Coinbase’s current strategy is the concept of the “Everything Exchange,” which aims to integrate trading, financial services, and applications. This multifaceted approach seeks to attract users through regulated trading markets, retain them via financial utilities like custody and lending, and provide infrastructure for on-chain applications to enhance overall network demand.
According to Coinbase’s financial data, consumer trading activity surged by 37% compared to the prior quarter, totaling $59 billion. Meanwhile, institutional transactions saw an impressive 122% quarter-over-quarter revenue growth, signaling strong interest in the platform.
Coinbase’s strategy also includes a focus on derivatives, underscored by its recent acquisition of Deribit, the largest crypto options exchange based on open interest. This $3 billion deal affords Coinbase a significant position in global derivatives trading, which constitutes approximately 80% of total crypto volume.
Stablecoins have also emerged as a pivotal growth driver for Coinbase. The firm’s partnership with Circle has resulted in the market capitalization of USDC reaching $74 billion—the highest on record. The average balances of USDC held within Coinbase products have grown to $15 billion, contributing $355 million in revenue and reflecting a 7% increase sequentially. Management views stablecoins as more than just investment vehicles; they are considered foundational to a new payments infrastructure.
To facilitate the integration of USDC in business operations, Coinbase has launched Payment APIs and B2B interfaces. These tools allow companies to automate treasury flows and manage payouts instantly via the Base network. Additionally, the introduction of Embedded Wallets offers developers a more seamless way to integrate wallet capabilities directly within their applications, enhancing user experience.
Coinbase anticipates further adoption of USDC, especially following the passage of the GENIUS Act, which clarifies the regulatory status of stablecoins and opens new institutional payment channels. The company is also expanding its international reach, targeting markets in Brazil and India where digital payment infrastructures are on the rise.
Further bolstering Coinbase’s revenue, its custody and financing services have driven subscription and services revenue, with assets under custody soaring to a record $300 billion. Coinbase serves as the primary custodian for over 80% of U.S. crypto ETF assets, establishing its role as an essential provider of infrastructure to the traditional finance sector.
The evolving global regulatory landscape appears to be in favor of crypto intermediaries, with significant milestones such as the GENIUS Act in the U.S., which includes stablecoin provisions, and regulatory acceptance of Coinbase’s perpetual futures. Internationally, Coinbase’s efforts in emerging markets harness the growing demand for cross-border settlements using stablecoins.
However, Coinbase faces stiffening competition as traditional financial institutions venture into custody and trading, alongside the rising prominence of decentralized exchanges. The firm’s established scale and brand reputation offer competitive advantages, but its continued success will hinge on ongoing investments in compliance and political advocacy across different jurisdictions.
Overall, Coinbase’s third-quarter results signal a noteworthy shift towards stability and consistent profitability, diverging from the erratic earnings patterns associated with the volatility of cryptocurrency prices. While the company’s liquidity and diversified revenue streams indicate reduced exposure to short-term market fluctuations, the long-term challenge remains whether it can leverage this stability to achieve sustainable growth—particularly through the real-world adoption of stablecoins and on-chain applications that have yet to gain widespread traction.
