Financial Performance and Bitcoin Accumulation
Coinbase increased its Bitcoin holdings by 2,772 coins during the third quarter, bringing total reserves to 14,548 Bitcoin valued at $1.57 billion. The exchange reported a net income of $432.6 million in Q3, representing a fivefold increase year-over-year. Total revenue climbed to $1.9 billion, up 55% from the previous year, according to the company's earnings report.
Transaction revenue reached $1.05 billion during the quarter, while subscription revenue rose 34.3% year-over-year to $746.7 million. Subscription figures include stablecoin revenue and blockchain rewards. The $299 million worth of Bitcoin purchases demonstrates Coinbase's commitment to accumulating the cryptocurrency as a long-term asset while also serving as custodian for Wall Street asset managers offering spot Bitcoin exchange-traded funds.
"Everything Exchange" Strategy and Institutional Dominance
The exchange continued expanding business verticals in pursuit of becoming an "Everything Exchange" during Q3. Coinbase stated it made progress by increasing tradable spot assets, expanding derivatives offerings, and establishing groundwork for additional pillars. A major component of this vision involves advancing stablecoin adoption through Circle's $USDC, alongside tokenized stocks, prediction markets, and early-stage token sales.
Institutional revenue dominated Coinbase trading activity, accounting for 80% of the $295 billion trading volume in Q3. Assets under custody surpassed $300 billion, setting another all-time high. The institutional focus has driven significant growth in the company's business model while establishing Coinbase as a key infrastructure provider for professional investors.
Ethereum's Growing Transaction Share and Base Network Development
Ethereum's share of Coinbase transaction volume reached 22%, nearly matching Bitcoin's 24% share. This represents a notable shift from previous quarters when Ethereum accounted for less than half of Bitcoin's transaction volume. The convergence suggests growing institutional interest in Ethereum alongside Bitcoin.
Activity on the Ethereum layer-2 Base network expanded across trading, payments, lending, and social applications during Q3. Coinbase launched Flashblocks, a transaction pre-confirmation feature enabling 200-millisecond block times. The development enhances user experience on the Base network while supporting the exchange's broader blockchain infrastructure goals.
Market Reaction and Future Outlook
COIN shares rose 2.84% in after-hours trading following the earnings release, recovering from a nearly 5.8% decline during regular trading hours on Thursday. The market responded positively to the financial results and the company's continued execution of its Everything Exchange strategy. CEO Brian Armstrong did not share new details during the earnings call regarding potential plans for launching a Base token.
The company emphasized transparency in its business model and commitment to clear communication with credit and equity investors. Coinbase's focus on expanding regulated cryptocurrency services positions the exchange to capitalize on growing institutional adoption while maintaining compliance with evolving regulatory frameworks.