Core Viewpoint - Coinbase is positioned for growth in 2026, driven by clearer U.S. crypto regulations and increasing institutional adoption of cryptocurrencies [1] Financial Performance - In Q3, Coinbase reported $1.9 billion in revenue, $801 million in adjusted EBITDA, and $433 million in net income [2] - The subscription and services segment generated $747 million, accounting for nearly 40% of total revenue [2] - Management anticipates Q4 subscription and services revenue to be between $710 million and $790 million, indicating a shift towards more stable revenue streams [3] Business Mix Improvement - Coinbase Institutional is a key custodian for U.S. spot Bitcoin and Ethereum ETFs, handling nine out of eleven Bitcoin ETFs and eight out of nine Ethereum ETFs in 2024 [4] - Major institutional clients like BlackRock and Pantera Capital are utilizing Coinbase Prime, leading to increased custody and brokerage fees [4] New Revenue Sources - The Ethereum Layer-2 network, Base, is emerging as a significant revenue source, processing transactions faster and at lower costs [5][6] - Coinbase earns revenue through sequencer fees on the Base network and benefits from additional services used by developers and users [7] Growth Opportunities - Derivatives trading, which constitutes 80% of total crypto trading volume, represents a substantial growth opportunity [8] - The acquisition of Deribit, a leading crypto options platform, contributed $52 million to revenue in Q3, with plans to integrate various trading options [8] Valuation Insights - Coinbase's stock trades at approximately 36.1 times forward earnings, reflecting a premium valuation justified by a diversified revenue mix [9] - The revenue is increasingly derived from recurring sources rather than solely from spot trading, although the stock remains sensitive to market conditions [9] Investment Consideration - Long-term investors confident in cryptocurrency adoption may consider a small stake in Coinbase ahead of its upcoming earnings report [10]

Summary of Coinbase Global FY Conference Call Company Overview - **Company**: Coinbase Global (NasdaqGS:COIN) - **Date**: December 10, 2025 - **Focus**: Cryptocurrency trading platform and services Key Points Market Volatility and Trading Activity - Recent trading activity in the crypto market has been volatile, influenced by macroeconomic factors such as tariffs announced by Trump, changes in Federal Reserve rates, and a poor price feed from a major exchange leading to significant liquidations [3][4] - The largest liquidation event in crypto history occurred, with $19 billion liquidated, primarily affecting non-U.S. exchanges [4] - Coinbase has seen positive net inflows into ETFs, indicating a potential stabilization in the market, with Bitcoin prices around $80,000 to $85,000 [5][6] Market Structure and Leverage - The U.S. has regulatory rules around leverage in contracts, but many non-regulated market participants operate with higher leverage, which can lead to market instability [7][8] - Coinbase maintains a conservative approach to leverage, with no significant losses reported in their credit book [10][11] Regulatory Environment - The regulatory landscape for crypto has shifted positively, with the Clarity for Payment Stablecoins Act passed, providing clearer rules for stablecoin issuance and usage [12][13] - The Clarity Act is expected to enhance market participation and innovation, potentially increasing competition for Coinbase [15][16] Business Development and Competition - Coinbase is actively pursuing acquisitions to enhance its capabilities, focusing on talent, products, and licenses [20][21] - The acquisition of Deribit, a leading options platform, aims to integrate options trading into Coinbase's offerings, enhancing capital efficiency for users [22][23] Institutional Offerings - Coinbase's institutional business has grown significantly, with over a third of the top 100 hedge funds as clients and an 80% market share in ETF custody [24][25] - The platform is positioned to serve new clients, including governments looking to acquire Bitcoin as a strategic reserve asset [27] USDC and Stablecoin Usage - Demand for USDC is growing among both retail and institutional clients, primarily used for liquidity and arbitrage across trading pairs [31][32] - Regulatory clarity has allowed Coinbase to offer rewards on stablecoin usage, differentiating it from traditional interest payments [34] Credit Card Launch - Coinbase has launched a credit card offering up to 4% Bitcoin back, aimed at customer acquisition and increasing engagement with the Coinbase One membership [35][36] Business Management Through Cycles - Coinbase has developed strong scenario planning and risk management strategies to navigate through crypto market cycles, ensuring operational efficiency and profitability [37][38] Additional Insights - The integration of options and futures trading is expected to enhance Coinbase's competitive position in the market [22][23] - The focus on regulatory clarity and institutional offerings positions Coinbase for growth as the crypto market matures [14][16][24]

Core Insights - BlackRock's Bitcoin ETF (IBIT) has reached $38 billion in open interest, making it the largest venue for Bitcoin options trading, surpassing Deribit [1][3] - The popularity of IBIT highlights the growing stature of crypto ETFs, even amidst institutional outflows and market challenges [3][5] - The recent expiration of $21 billion in Bitcoin and Ethereum options created significant stress for derivatives exchanges, but ETFs like IBIT managed to weather these setbacks more effectively [4][5] Market Dynamics - Coinbase's acquisition of Deribit for $2.9 billion indicates a strong interest in expanding the Bitcoin and crypto options markets, with Deribit's stock rising 37% during negotiations [2] - Despite the challenges faced by Deribit, IBIT's performance suggests a potential shift in dominance towards ETFs in the crypto options landscape [3][4] - The anticipated influx of altcoin ETFs post-US government shutdown could further enhance the market dynamics for crypto ETFs [5]