Coinbase Buys $300M Bitcoin In Q3, Reports Strong Earnings

Coinbase I mentioned Third-quarter earnings were stronger than expected Thursday, reporting $1.9 billion in revenue — up 26% from the previous quarter — as renewed cryptocurrency market momentum boosted trading and stablecoin income.

The San Francisco-based exchange reported net income of $433 million, or $1.50 per share, beating Wall Street expectations of $1.10 per share on revenue of $1.8 billion.

Despite the sequential decline from its record $1.4 billion earnings in the second quarter, Coinbase attributed the decline primarily to non-cash market adjustments related to its holdings in Circle and its cryptocurrency portfolio.

Coinbase Global (COIN) shares jumped more than 4% in after-hours trading to $341 following the results.

The stock is up nearly 33% year to date after peaking above $440 in July.

Coinbase also purchased nearly $300 million worth of BTC in the third quarter. CEO Brian Armstrong confirmed via Share X This is still a bullish trend for Bitcoin, saying: “Coinbase is long Bitcoin. Our holdings increased by 2,772 BTC in Q3. We continue to buy more.”

Coinbase trading activity has surged due to the rise in cryptocurrencies

The results came as Bitcoin reached all-time highs during the quarter, sparking renewed retail and institutional activity after a quieter second quarter marked by macro headwinds.

Coinbase reported $1.0 billion in transaction revenue, up 37% from the previous quarter and 83% from the previous year, on trading volume of $295 billion.

Institutional volume rose 22% sequentially to $236 billion, driven in part by the August acquisition of Deribit, the world’s largest cryptocurrency options exchange.

Deribit contributed $52 million in revenue during the third quarter as Coinbase expanded its derivatives business to include 24/7 perpetual futures trading in the US.

Retail activity also rebounded, with consumer trading volume rising 37% to $59 billion. Coinbase said new listings and decentralized exchange (DEX) integrations have helped boost activity among “sophisticated traders,” while the company’s platform now supports trading for nearly 90% of all cryptocurrency assets by market capitalization.

Enhance subscription and services

Coinbase continues to diversify beyond trading fees, with subscriptions and services revenue rising 14% to $747 million.

Stablecoin revenue — largely derived from its role in distributing and managing Circle’s USDC — rose to $355 million, an increase of 43% year over year. Average USDC balances held in Coinbase products have reached a record high of $15 billion, fueled by rising market cap and new institutional rewards programs.

Blockchain rewards, including staking income, rose 28% QoQ to $185 million, supported by higher Ethereum and Solana prices.

Meanwhile, custody fees and interest income reached new highs as total assets on the platform reached $516 billion.

Building towards “exchanging everything”

Coinbase said it is progressing towards its vision of an “everything exchange” – a platform that unifies spot, derivatives and connected services under one roof.

The exchange also highlighted the ongoing development of a baseits Ethereum Layer-2 network, which has become the L2 leader in stablecoin adoption with $4.6 billion in dollar-pegged assets.

CEO Brian Armstrong said Coinbase is working to scale payments by “boosting the adoption of stablecoins” and building the foundation of the future financial system.