Coinbase (COIN) Q3 Net Income Hits $719M, Nearly All Unrealized Crypto Gains

Coinbase's $719M Quarter and Its Fine Print

Investors reading the third-quarter filing from Coinbase (COIN) wanted one question answered: can a wider product shelf carry the business when trading slows? The document, posted to SEC EDGAR on October 29, gives a split answer. Total revenue came to $1.216 billion, down 35% year over year but roughly flat with the second quarter. Transaction revenue landed at $590 million, a 44% yearly decline and 1% lower sequentially, as volatility sank to multi-year lows. Subscription and services revenue did the supporting work, rising 3% from the prior quarter to $570 million and reaching 49% of net revenue against 41% a year earlier. Stablecoin revenue rose 5% quarter over quarter to $307 million, alongside $86 million in blockchain rewards and $69 million in interest and finance-fee income. Market share climbed to 10.7%, a fourth straight quarterly increase from 5.6% a year ago.

COINOTAG data shows Coinbase (COIN) last trading at $134.22, down 2.60% over 24 hours after a daily range of $131.92 to $139.62. The daily RSI sits at 31.6 with a bearish MACD signal inside a downtrend, and the strongest resistance above the market is $143.59, scored 91 out of 100.

The profit line needs a caveat. Net income of $719 million, or $2.51 per diluted share, included $715 million of unrealized gains on crypto the company holds, close to 99% of the total. Adjusted net income was $78 million, and operating income of $61.7 million compares with $481 million a year earlier. CFO Alesia Haas told investors the quarter's net income rested on those unrealized marks, while adjusted EBITDA rose 60% sequentially to $333 million. The brightest new product was prediction markets, launched in February: annualized revenue passed $200 million, daily users rose more than 60% from the previous quarter, and together with derivatives the line now contributes about a quarter of transaction revenue. Consumer spot trading volume fell 9% quarter over quarter and institutional revenue 8%. The crypto exchange guided that transaction revenue for October 1 to 25 ran near $165 million and warned against extrapolating it. Sell-side reactions split: Barclays cut its target to $120 from $149 on a weak fourth-quarter outlook, while Oppenheimer raised its target to $207, citing stablecoin and prediction-market growth.

Circle's Reserve Squeeze and Robinhood's Shift

On the same reporting cycle, stablecoin issuer Circle Internet Group (CRCL) showed the sharpest gap between headline and engine. Total revenue and reserve income reached $865 million, up 17% year over year, with adjusted EBITDA of $317 million, up 85%, and net income from continuing operations of $226 million, up 5%. Underneath, reserve income fell 8% to $658 million: the return rate on reserves slipped to 3.5%, 61 basis points lower than a year before, and average USDC circulation of $73.3 billion, up 8%, only partly offset that. USDC supply ended September at $73.9 billion, flat year over year, and stablecoin market share slipped to 27%, down 183 basis points. What carried the headline was other revenue of $207 million, up 627%, of which $182 million came from presales of tokens for its new Arc blockchain; strip that one-off and revenue would have fallen about 8%. Usage kept growing: on-chain USDC transaction volume rose 49% to $13.9 trillion, the payments network reached $41.3 billion in annualized volume, and USDC held on Circle's platform grew 36% to $13.9 billion. The company also trimmed about 5% of its workforce, took a $100 million equity investment from Binance alongside a partnership renewal, agreed to buy Singapore-based payments firm Tazapay in a deal expected to close in 2027, and launched the Arc mainnet on September 16 with a genesis supply of 10 billion ARC tokens. Full-year guidance held at $310 million to $330 million in other revenue and $570 million to $585 million in adjusted operating costs.

Robinhood (HOOD) ran the opposite mix. Total net revenue hit a record $1.42 billion, up 12%, on trading-related revenue of $867 million, up 19%. Event contracts brought in $173 million, more than six times a year earlier, options $399 million, up 31%, and equities $121 million, up 41%, while crypto revenue fell 55% to $120 million. Net interest income slipped 9% to $415 million, net income fell 14% to $476 million ($0.51 per diluted share), and platform assets reached $396 billion, up 19%. Shares of all three companies have slid over the past five sessions, led by Circle's 11% drop, as crypto prices sank after the midterm elections on November 3 pushed the market deeper into what now looks like a bear market.

Our reading: both filings describe the same trade. Revenue lines untied to spot crypto are compounding, while every line tied to trading volume or interest rates is shrinking, and the new lines earn less per dollar. Clear Street estimates Coinbase keeps about 1.5 cents on each prediction-market contract routed through Kalshi, against roughly 2 cents if it cleared them in-house. Stablecoin economics tighten too: with record average USDC balances of $22 billion on its platform, Coinbase's stablecoin revenue still rose just 3% quarter over quarter and fell about 16% year over year once rising user rewards were counted. For the quarter's answer to hold into the next session, COINOTAG's composite puts the level to defend at $131.13, the strongest support on the map at 84 out of 100.