According to Forbes, Coinbase reported $433 million in net income for Q3 2025 with total revenue reaching $1.9 billion, representing 25% quarter-over-quarter growth. The company significantly increased its bitcoin holdings by $299 million through weekly purchases, bringing its total bitcoin position to 14,548 coins valued at $1.6 billion as part of $2.6 billion in total crypto assets held for investment. Transaction revenue reached $1.0 billion, up 37% from the previous quarter but below earlier peaks, while subscription and services revenue grew to $747 million with stablecoin revenue accounting for $355 million of that total. The company’s strategic direction appears to be shifting from pure trading facilitation toward becoming crypto infrastructure, with assets under custody reaching an all-time high of $300 billion and USDC market capitalization hitting $74 billion. This earnings report reveals a company undergoing fundamental transformation.
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The Corporate Bitcoin Playbook Goes Mainstream
Coinbase’s systematic bitcoin accumulation represents more than just portfolio diversification—it’s a validation of the corporate treasury strategy pioneered by MicroStrategy and others. What makes this particularly significant is that Coinbase isn’t just any company adopting bitcoin; it’s the primary custodian for over 80% of U.S. bitcoin ETFs. This creates an interesting dynamic where the company simultaneously holds bitcoin as a strategic asset while facilitating institutional access through custodial services. The $299 million quarterly purchase pattern suggests they’re dollar-cost averaging into the position, a sophisticated approach that reduces timing risk. However, this strategy carries substantial balance sheet volatility that could impact quarterly results during significant bitcoin price corrections.
The Quiet Stablecoin Revolution
The most underappreciated aspect of Coinbase’s transformation is its positioning within the USD Coin (USDC) ecosystem. With USDC market capitalization reaching $74 billion and Coinbase customers driving the majority of growth, the company has effectively created a parallel banking system. The $355 million in stablecoin revenue, while partially subsidized through rewards programs, represents a fundamentally different business model than transaction fees. This revenue stream is more predictable, less dependent on market volatility, and positions Coinbase as infrastructure rather than just an exchange. The timing aligns perfectly with regulatory clarity from the GENIUS Act, which could accelerate institutional adoption of stablecoins for treasury management and payments.
The Derivatives Gambit
Coinbase’s derivatives expansion, particularly through the Deribit acquisition and U.S. perpetual futures launch, represents a critical competitive move against established players like Binance and FTX’s remnants. Processing $840 billion in notional derivatives volume during Q3 signals that Coinbase is successfully capturing market share in higher-margin products. The 24/7 trading with up to 10x leverage addresses a key demand from sophisticated traders who previously had to use offshore platforms. However, this expansion brings significant regulatory complexity and risk management challenges that could test Coinbase’s compliance infrastructure, especially as derivatives typically involve more leverage and potential for cascading liquidations during volatile markets.
From Exchange to Everything Platform
Coinbase’s vision of becoming an “Everything Exchange” supporting 90% of total cryptocurrency market capitalization represents a fundamental reimagining of what a crypto business can be. The integration of decentralized exchanges through Base, providing access to over 40,000 assets, demonstrates recognition that the future of crypto trading may be hybrid rather than purely centralized. This approach allows Coinbase to capture value across both centralized and decentralized ecosystems while mitigating regulatory risk for more speculative assets. The company is effectively building a comprehensive financial services platform that spans trading, custody, derivatives, stablecoins, and application infrastructure—a far cry from its origins as a simple bitcoin brokerage.
The Revenue Model Transformation
The most telling metric in Coinbase’s quarterly report isn’t the absolute revenue numbers but the composition shift. While transaction revenue remains substantial at $1.0 billion, its relative importance is declining as subscription and services revenue grows to $747 million. This diversification is crucial for long-term sustainability, as transaction revenue is inherently cyclical and dependent on market conditions and trading volume. The company’s guidance for Q4 subscription revenue between $710-$790 million, driven by USDC growth and Coinbase One subscriptions, suggests management expects this trend to continue. However, the wide range in sales and marketing guidance ($215-$315 million) indicates uncertainty about how aggressively to pursue growth in different segments.
Strategic Implications and Risks
Coinbase’s transformation carries significant strategic implications for the broader crypto industry. As one of the few publicly traded crypto natives, its business model evolution provides a roadmap for other exchanges considering diversification. The increasing reliance on stablecoin revenue creates both opportunity and vulnerability—opportunity through predictable revenue streams, but vulnerability through regulatory scrutiny of stablecoins and potential competition from traditional financial institutions entering the space. The company’s growing employee count and technology expenses ($431 million in Q3) suggest heavy investment in infrastructure that may take multiple quarters to yield returns. Most importantly, Coinbase’s success in balancing its legacy trading business with emerging infrastructure services will determine whether it remains the dominant Western crypto platform or gets disrupted by more specialized competitors.
