Coinbase Global, Inc. Class A Common Stock 2026 Q3 Earnings Call

Hi, everyone. Thanks for joining us live on X. I'm Alesia Haas, CFO of Coinbase, and I'm here with our co-founder and CEO, Brian Armstrong, and a few independent and institutional research analysts. If you haven't already, please head over to our IR website to watch the videos we posted of Brian and I discussing our quarterly results. In this session right now, we are excited to directly connect with you, our customers, our community, our shareholders, and we want to talk about our quarter and answer questions. Just as a friendly reminder, we're not going to answer any questions on when XYZ token. We have a robust asset listing process that we follow, and we're not going to talk about any customer support cases. Besides from those simple ground rules, it is open question time. First up, I'd like to introduce Andrew.

Before you answer, Brian, I just wanted to apologize, Andrew, I should've given you a more robust introduction. With us folks is Andrew Jeffrey, who is an institutional research analyst with William Blair. With that, Brian, over to you. What is the BTC value proposition today in 2026?

Yeah. I think it's evolving. You're right. It's obviously still a store of value. We're super bullish on Bitcoin. I think we just purchased our 18,000th Bitcoin, actually, on Coinbase balance sheet. Alesia has a Bitcoin- Happy birthday Bitcoin pillow.

Yeah, it is Bitcoin's birthday coming up, too. I think what you are getting at is correct, which is now that you can use Bitcoin as collateral, it actually improves liquidity for trading. So, that is improving DEX trading, for instance, with Bitcoin. A lot of our customers who were early in Bitcoin, they do not want to ever sell their Bitcoin, but they do want to use it as collateral. Base, for instance, has done really well recently by growing its financing product. So you can use that Bitcoin as collateral, get financing, go and do more trading. It is pretty synergistic, and I think that is definitely a big trend that is happening right now. Just broadly, I would say in this cycle that we are in, it is always difficult to call these things exactly, but we are seeing volumes rebounding and more institutions coming and onboarding.

I think it is an exciting road ahead for Bitcoin.

I would just comment that we saw significant ETF inflows into Bitcoin specifically this quarter as people recognized that the price has stabilized. One, Bitcoin is still a critical asset to us, but we are Bitcoin. People can now trade a lot of things, and we have seen volatility come down in Bitcoin with the institutional adoption of this as an asset class. I think that that is providing it to be an important diversification in a lot of people's investment portfolios.

Absolutely. Prediction Markets is one of our fastest-growing new revenue products. We just launched it in February this year, and during the third quarter, it crossed $200 million of annualized run rate revenue. What is great about that is this is a market where overall spot crypto trading was actually down. We saw overall crypto spot trading volume down 10% quarter-over-quarter. The growth in Prediction Markets offset the decline in overall spot trading, and we delivered flat revenue quarter-over-quarter. The mix shift considerably. When we look at the mix of our overall revenue, it is really interesting to look at this quarter. Predictions plus derivatives, so those two combined, were about 25% of our total transaction revenue. If I look at then our total revenue, subscription services was roughly 49% of total net revenues.

We are seeing the investments that we have made over the past few years to really diversify our revenue really come to our benefit as, I love what Brian says, there is always a market somewhere. People are shifting their trading behavior to the asset that is most interesting and most exciting in the markets that they want to trade in. What we saw right now in this quarter, a lot of that was around predictions. I also want to share with you, this is not cannibalizing our spot trading. What we are seeing is this is all incremental. When we look at our trading profile, people are still continuing to trade spot, just maybe at a lesser level than they did in past quarters, and they are putting incremental dollars to trade in Prediction Markets and derivatives. Really, these are additive to our product offering right now.

Brian, do you want me to start here, and then you can add on?

Yeah, go for it. All right.

Well, we are proud to be a co-founder of USDC, and we are very committed to growing USDC. We also want to support other high-quality regulated stablecoins. You saw that we also partnered, with an example, with OUSD. We also have PYUSD on our platform. We will be supporting our customers in whatever asset they want to trade and whatever asset they want to transact with in crypto. So we think about ourselves asset agnostic that way. But because of our commercial relationship with Circle, where we have a strong economic interest to grow USDC, we are active in supporting this overall USDC ecosystem. Coinbase focuses on distribution, the customer relationships, the infrastructure, and really deeply integrating USDC and opportunities to use stablecoins in transaction flows within our products. This means that we are using this collateral with our derivatives exchange, as an example.