Retail investors support half of the market? Breakdown of Coinbase Q3 financial report

Written by: KarenZ, Foresight News

On the last day of October, Coinbase released its financial report for the third quarter of 2025, demonstrating strong operational resilience and growth potential. It not only achieved double-digit quarter-over-quarter growth in revenue and profit but also made key progress in dimensions such as advancing the “Everything Exchange” strategy, breakthroughs in stablecoins and payments, derivatives business, and expansion of custody services.

Core Financial Report Highlights

Revenue Structure: Q3 total revenue is 1.869 billion USD, with trading revenue accounting for 56%.

Total revenue in the third quarter reached $1.869 billion, a quarter-on-quarter growth of 25%, driven primarily by the recovery of trading business and steady growth in subscription services.

Among them, trading revenue increased by 82.7% year-on-year to 1.046 billion USD, with a quarter-on-quarter growth of 37%. Of this, the trading revenue from individual retail users reached 844 million USD, accounting for over 80% of total trading revenue; institutional trading revenue was 135 million USD, with a quarter-on-quarter growth rate of 122%, mainly due to business synergies after the acquisition of Deribit.

Subscription and service revenue reached $747 million, a quarter-on-quarter increase of 14%. Diversified revenue sources, including stablecoin-related income ($355 million), blockchain rewards ($185 million), and interest and financial service fees ($64.8 million), continue to perform strongly.

How to reduce costs and increase efficiency?

Operating costs decreased by 9% month-on-month to $1.388 billion; however, core investments such as technology research and development and marketing have increased (including the acquisition of Deribit).

Net profit was $433 million, adjusted net profit was $421 million, and adjusted EBITDA reached $801 million.

Increase in cryptocurrency holdings

Coinbase increased its holdings by 2,772 BTC and 11,933 ETH in the third quarter, bringing its total Bitcoin holdings to 14,458 and its total Ethereum holdings to 148,715.

Core data of the platform

Platform assets: Coinbase holds or manages assets for clients amounting to $516 billion, of which custodial assets have surpassed $300 billion for the first time, setting a record high, partly due to Coinbase being the primary custodian for the majority of cryptocurrency ETFs.

Liquidity Reserves: As of the end of the third quarter, Coinbase has $11.9 billion in USD assets (including $7.042 billion in money market funds, $1.524 billion in corporate cash, and $3.216 billion in USDC), a quarter-over-quarter increase of 28%, mainly driven by the issuance of $3 billion in convertible bonds and revenue growth. If we include $2.6 billion in crypto assets for investment and $1 billion in crypto collateral assets, total available resources reach $15.5 billion.

Trading Volume: In the third quarter, Coinbase's global cryptocurrency spot trading volume increased by 38% quarter-on-quarter, while the U.S. cryptocurrency spot trading volume grew by 29%, with a total trading volume of $295 billion. Among them, the retail spot trading volume grew by 37% quarter-on-quarter to $59 billion, showing a significant increase in activity.

USDC Related Scale: The market capitalization of USDC reached a historical peak of 74 billion USD in Q3, with an average USDC balance of 15 billion USD on the Coinbase platform in the third quarter, a quarter-on-quarter increase of 9%.

Client Scale: The number of active clients in institutional financing business achieved double-digit quarterly growth, with the average loan balance for institutional financing reaching 1.2 billion USD, setting a new historical high.

Number of Employees: The number of full-time employees increased by 12% month-on-month, reaching 4,795.

Strategic Implementation: The Blueprint of the “All-Category Exchange” Accelerates Formation

Coinbase continues to advance its “Everything Exchange” strategy in Q3 by accelerating the construction of a comprehensive financial services platform through asset coverage, business extension, and ecosystem improvement.

Asset coverage and derivatives business dual-line breakthrough

The coverage of spot assets continues to expand, meeting users' diverse investment needs by connecting to DEX on Base.

The derivatives business has achieved milestone growth, completing the acquisition of Deribit and launching US-compliant perpetual futures and 24-hour uninterrupted trading services.

The financial report shows that in the third quarter, Coinbase's institutional trading revenue reached $135 million, a significant increase of 22% quarter-over-quarter. Deribit contributed $52 million in revenue, accounting for nearly 39% of institutional trading income, with this contribution primarily coming from the continued growth of its options trading business. After the acquisition, Deribit has significantly boosted Coinbase's nominal trading volume in the global crypto options market, with a combined nominal trading volume of over $840 billion in derivatives achieved by both parties in Q3.

At the same time, Deribit's inclusion has directly propelled Coinbase's market share in the core derivatives market to break through. Looking at the overall performance in Q3, Deribit has initially completed its transformation from an “acquisition target” to a “strategic asset”: in the short term, it has brought dual growth in revenue and market share to Coinbase, in the medium term, it has improved the business ecosystem through product and customer synergy, and in the long term, it has built barriers for its competition in the compliant derivatives market. As the demand for crypto options from institutions continues to grow, Deribit is expected to become one of Coinbase's core growth engines in the next 1-2 years.

Stablecoins, payment scenarios accelerate penetration

In the third quarter, Coinbase users held an average of $15 billion worth of USDC.

Expanding payment scenarios: Coinbase launches payment API and B2B payment UI/API, allowing businesses to embed stablecoin checkout with USDC on the Base chain, and features like 24-hour payments.

The Coinbase One Card integrates cryptocurrency rewards into fiat payments, with total spending exceeding 100 million dollars.

Promoting the implementation of the x402 protocol: This protocol can attach stablecoin payments to any network request and has attracted partners such as CloudFlare, Vercel, and Google for integration; Coinbase has also released the open-source toolkit Agent Kit, which supports AI agent integration with stablecoin wallets, seizing a new track in internet payments and AI agent payments.

Base Upgrade and Ecological Expansion

After Base launched on the Flashblocks mainnet, the block confirmation time was further reduced to 200 milliseconds, significantly improving transaction efficiency.

The Base testnet has introduced cross-chain functionality between Base and Solana, allowing users and developers to transfer assets more easily between the two networks. The mainnet support is set to launch in the fourth quarter.

The Base App entered the testing phase in the third quarter, integrating multiple functions such as trading, social networking, and payment, while the embedded wallet reduces the entry barriers for users.

Capital formation: Acquiring Echo to expand business upward.

In late October, Coinbase announced that it had completed the acquisition of Echo for approximately $375 million, consisting of a combination of cash and stock.

Coinbase co-founder and CEO Brian Armstrong emphasized during the Q&A session of the third quarter earnings call that cryptocurrency technology will revolutionize the financial system, with capital formation being an important aspect of this. Acquiring Echo can help Coinbase secure a position in the capital formation space.

Brian Armstrong continued to state that Echo allows anyone to raise funds more easily, and with over $500 billion in assets on the Coinbase platform, along with a large number of retail institutional clients or accredited investors looking to invest in unique assets, the combination of the two will create a powerful bilateral market, making capital formation more efficient and allowing more people to participate.

Emilie Choi, President and Chief Operating Officer of Coinbase, also pointed out that Echo's management team is able to accurately assess which companies and tokens have growth potential. If Echo successfully launches these outstanding companies and tokens, it will help Coinbase expand its upstream business, as this relates to the issuance phase of tokens before they enter exchanges, representing a strong vertical integration that is very beneficial to the entire product ecosystem of Coinbase.

Summary

Coinbase's third-quarter performance conveyed several important signals: First, the growth of stablecoins, institutional financing, and custody services indicates that institutional-level demand is continuing to expand. Additionally, Coinbase's diversification strategy is proving effective. While trading revenue still accounts for a significant proportion, the growth rate of subscription and service revenue suggests that Coinbase is building a more stable revenue base.

According to Coinbase's financial report, Coinbase will continue to deepen its layout in the full range of trading categories, including “spot, derivatives, stocks, prediction markets, and commodities,” and will leverage the advantages of Echo to strengthen its positioning in capital formation. Additionally, it will enhance the ecological aggregation capabilities of the Base chain and further expand its global market share by developing compliant businesses in emerging markets such as Brazil and India.