Coinbase Q3 Report: Surges 32% on Trading, Stablecoin Momentum

Core Insights - Coinbase reported a stronger-than-expected third quarter, driven by increased crypto trading activity and institutional demand, with shares rising nearly 3% in after-hours trading and a total gain of 32% since the start of 2025 [1] Financial Performance - The company announced $1.87 billion in revenue and $433 million in profit for Q3, with transaction-based revenue increasing by 83% year-over-year to $1 billion and subscriptions and services rising by 34% to $747 million [3] - Institutional trading revenues grew over 120% in the quarter, with trading volumes up 22% quarter-over-quarter following the acquisition of Deribit for $2.9 billion [4][3] Strategic Focus - Coinbase's strategic emphasis on stablecoins and institutional services contributed to its market performance, with stablecoin-related income reaching $354 million and average USDC across products hitting a record $15 billion [4][3] - The company is expanding its Bitcoin exposure and maintaining a sustained buying approach throughout the period [5] Institutional Expansion - Coinbase's partnerships with major US banks, including JPMorgan, Citigroup, and PNC, aim to provide crypto-as-a-service and payments integration, potentially reshaping its long-term business model [5][6] - The company applied for a national trust bank charter to enhance institutional custody and treasury operations, which could solidify its role as a core infrastructure provider in the crypto-financial ecosystem [6] Future Prospects - Coinbase is exploring a potential token launch for its Ethereum layer-2 network, Base, with JPMorgan analysts estimating that the token could add up to $12 billion in value to Coinbase's market capitalization [6]