On October 31, 2025, Coinbase released its Q3 financial report, which comes at just the right time, injecting a dose of strong wick candle into the liquidity-starved encryption industry.
Total revenue reached 1.87 billion USD, a year-on-year increase of 55% and a quarter-on-quarter increase of 25%. Net profit was 433 million USD, compared to only 75.5 million USD in the same period last year. Earnings per share were 1.50 USD, exceeding analysts' expectations by 45%. Wall Street analysts collectively applauded, and J.P. Morgan upgraded the rating to “overweight” last week, with a target price of 404 USD.
Just when many expected that the liquidity in the cryptocurrency market would be poor in the third quarter and trading volume would not meet expectations, Coinbase provided a perfect answer with consumer trading volume soaring to 59 billion USD, a 37% increase from the previous quarter. Retail trading revenue reached 844 million USD.
In addition, Coinbase has been increasing its investment in Bitcoin. Through a weekly dollar-cost averaging strategy, it has accumulated an additional $299 million in Bitcoin this quarter. As of now, its total Bitcoin holdings have reached 14,548 coins.
CEO Brain Armstrong stated during the company's earnings call: “'Everything is tradable' is the core of the next phase we are building.” In addition, Coinbase is integrating prediction markets, tokenized stocks, and other products into its platform.
Behind the idea that everything can be traded, Coinbase is no longer the guardian of cryptocurrency; it is becoming a “crypto version of the Apple ecosystem” that connects humans and capital.
What ambitions has Coinbase laid out behind the increase of 14,548 BTC?
Wall Street “Turnaround Like” : Base×USDC from Side Hustle to Cash Cow
Looking back from 2023 to now, the stock price of the first crypto stock Coinbase has been like a roller coaster, climbing from a low of 30 dollars to now over 300 dollars, relying not on luck, but on two legs: Base and USDC.
These two were originally “side hustles”, but have now become cash cows, with Wall Street's turnaround praise coming swiftly and directly.
COIN Price Chart ｜ Source: Tradingview
First, J.P. Morgan's rating was upgraded to “Overweight.”
On October 24, analyst Kenneth Worthington stated in a report that “Coinbase's valuation is underestimated, and the potential opportunity for the Base token is valued at $12 billion to $34 billion.”
Base is an Ethereum Layer 2 network incubated by Coinbase, which was launched in 2023 as just a “low-fee experimental field,” but has now become a star.
How does this money come about? Base, as an Optimistic Rollup, requires each transaction to leverage scale effects to be packaged on-chain by a single sequencer. Although the fees are low (averaging $0.01 per transaction), the scale effects are terrifying—daily transaction volumes have exceeded 5 million multiple times, twice that of the mainnet. The sequencer model allows fee income to become a strong source of cash flow.
Base Sorter Revenue | Source: Dune
Coinbase transfers all these fees into its own custody accounts, citing “security and auditing” as the reason, but the community has complained that this is “centralized bloodsucking.” Management responded at the earnings call that it will explore ecosystem profit sharing in the future, such as returning a portion of the fees to developers or users to create a positive feedback loop.
What is even more exciting is the potential native token of Base.
J.P. Morgan predicts that if Base issues a native token, its market value could reach hundreds of billions of dollars.
What can tokens do? Stimulate usage elasticity, holders can participate in governance, stake to earn fee-sharing, and even use for gas fee discounts. With daily active users in the millions, the fee income elasticity is enormous. If the token is implemented, Base could transform from a “cost center” to a “profit engine” in no time.
Looking at USDC, this stablecoin is a joint asset of Coinbase and Circle.
Q3 financial report shows that the market value of USDC reached a historical high of 74 billion USD, with an average balance of USDC on the Coinbase platform of 15 billion USD, a month-on-month increase of 9%. The average balance of USDC outside the platform is 53 billion USD, a month-on-month increase of 12%. Stablecoin revenue is 355 million USD, a month-on-month increase of 7%.
Stablecoin income and blockchain income | Source: Coinbase
Its sources of income are diverse, including interest rate spread (investing USDC reserves in US Treasuries for a return of 4-5%), custody fees (Coinbase Prime provides custody for institutions, taking a cut of 0.1-0.2%), liquidation fees (cross-border transfer fees), and merchant sharing (integrated into e-commerce platforms like Shopify, taking a cut of 1%).
Why is USDC so profitable?
Because it has penetrated merchants and cross-border settlement. Management revealed that the penetration rate of USDC in cross-border payments has reached 15%, especially in emerging markets such as Latin America and Southeast Asia, where users use it to avoid foreign exchange fluctuations. For example, after Remitly and Wise integrated USDC, transfer costs dropped by 30%, and Coinbase benefited as well.
More importantly, USDC is transitioning from a “storage tool” to a “payment medium.” Sell-side analysts have mentioned that Coinbase may expand its distribution, such as issuing L2 exclusive USDC variants or deeply integrating with DeFi protocols. Timeline? Management says “the results will be seen in the first half of next year.”
The synergy between Base and USDC is a killer feature. Base uses USDC as its native gas fee, with transaction costs as low as $0.001, attracting the DeFi and NFT ecosystems. The essence of Wall Street's praise is seeing Coinbase shift from “volatility dependence” to “stable rent collection.”
In the past, trading revenue accounted for 80%, and it would be halved during bear markets; now subscription services account for 40%, showing strong anti-cyclicality.
Of course, the risk still exists.
Regulation is a double-edged sword - the SEC's scrutiny of stablecoins is becoming increasingly strict, and Base's centralized sequencer may also attract attacks from “decentralization purists”.
But from the financial report, the management is very confident: “We are not betting on the market; we are building infrastructure.” Coinbase is steadily and ambitiously transitioning from a side business to a cash cow.
Empire Continues Expansion
Coinbase's expansion resembles that of the Roman Empire, advancing step by step from an exchange to custody and then to the primary market. The most eye-catching acquisition in the Q3 financial report was the acquisition of the Echo blockchain financing platform for $375 million on October 21.
From issuance, listing to trading and custody, Coinbase uses six anchors to stabilize its ecosystem, propelling itself towards being the “encryption version of Apple”. Developers come and don’t want to leave, institutions come in and can’t walk away, and users can’t live without it.
First, let's talk about the technical infrastructure, the cornerstone of the Coinbase empire.
Base chain is not just another Layer 2, but Coinbase's “iOS”, compatible with the Ethereum ecosystem, but core control is in-house.
Top protocols like Aave and Uniswap have settled in, but the value of Base lies in its “app store” attribute. By acquiring Spindl (an on-chain ad attribution tool), Coinbase can track user sources and behavior conversions, similar to the recommendation mechanism of the App Store, thereby controlling traffic distribution. Do developers want to acquire customers? They must use Spindl, and Coinbase will decide who gets on the recommendation list based on this.
The acquisition of Iron Fish addresses privacy shortcomings. Under high regulatory pressure, Base integrates zero-knowledge proofs to balance compliance and user privacy, emulating Apple's privacy protection strategy. More critically, Base connects directly to Coinbase's 100 million users, allowing developers to access massive traffic immediately upon launch, an advantage that Arbitrum or Polygon find hard to compete with.
The capital formation system is the second pillar, and the acquisition of Echo is the main event.
Echo is an on-chain capital inheritance platform founded by the renowned encryption trader Cobie, which has the Sonar public fundraising tool under its wing. Echo has helped over 300 projects raise more than 200 million dollars, such as the token sale of Plasma's XPL.
Why is Coinbase interested in it?
Because primary issuance is the “upstream source” of Crypto. The traditional VC model is closed, making it difficult for retail investors to participate; Echo allows projects to directly raise funds from the community, covering both private and public sales. The acquisition price is 375 million (cash + stock), which is small compared to Coinbase's 70 billion market value, but the strategic value is huge, as it fills the “capital formation” gap for Coinbase.
Echo Fundraising Volume Chart｜Source: Dune
The integration roadmap has taken shape. Echo will be embedded in the Coinbase ecosystem, issuing approvals using Coinbase's compliance framework (KYC/AML), disclosing through Base's transparent ledger, and connecting secondary market making to Coinbase Exchange, with custody automatically accessing Prime. The first batch of issued categories will focus on encryption tokens, with a target scale of 1 billion dollars by Q1 next year.
For institutions, Coinbase has launched a settlement toolkit, real-time clearing, and data API; for developers, Sonar will upgrade to support privacy-enhancing fundraising (zero-knowledge proofs to avoid sensitive disclosures). The on-chain crowdfunding platform founded by KOL Cobie has raised $51 million, completing 131 transactions. The first project, Ethena's USDe stablecoin, has seen rapid growth, demonstrating its potential.
Echo's Sonar tool allows founders to self-host token sales, reviving the ICO model from 2017, but it's not the same anymore—with the GENIUS Act providing support and a clear regulatory framework. Coinbase has officially stated that they will start with cryptocurrency token sales and expand to tokenized securities and real-world assets (RWA).
This ambitious vision is not just about Crypto, but rather the financialization of everything, with stocks, real estate, and art being issued on-chain.
The missing piece of the puzzle is the acquisition of Liquifi, which provides full lifecycle management of tokens - issuance, distribution, locking, and Liquidity. Echo manages “who can finance”, while Liquifi manages “how to operate”, forming a closed loop.
The institutional market is the third pillar. The acquisition of Deribit is a milestone in the history of encryption, acquiring the world's largest derivatives exchange for $2.9 billion, with institutional clients accounting for 70% and daily volumes in the billions. Coinbase, which previously focused on retail and had weak derivatives, has now filled its gaps, with significant increases in options depth and futures liquidity.
This is a combination of investment banking and retail, similar to Goldman Sachs. Institutions are not just trading, but also becoming seed users of Base/USDC. The management revealed that after integration with Deribit, the cross-selling rate reached 40%, with institutions expanding from derivatives into custody and clearing.
The retail entry is the fourth pillar. The Coinbase credit card is not a payment tool but the “last link” in the ecosystem.
Cooperating with AmEx, high-end positioning, users have an average monthly spending of 3000 dollars, above average. Cashback of 2-4% in Bitcoin, linked to platform assets, with a high holding amount and proportion.
At a deeper level, it is data, and consumption habits are used for precision marketing, recommending NFTs or DeFi. This model forms a closed-loop effect, where users earn cashback by swiping their cards, and then invest the cashback amount into Base to obtain higher cashback, further stimulating more consumption. With regulatory support, this bridges fiat currency and Crypto, lowering the entry barrier.
Content ecology is the fifth pillar. On October 20, Coinbase spent $25 million to buy NFTs and reboot the UpOnly podcast—a bull market god program hosted by Cobie/Ledger. It is not a coincidence, as it belongs to the Cobie system along with Echo.
This is a cultural positioning, promoting UpOnly's philosophy and products, enhancing community influence. Coinbase does not control advertisements/creations, it's a pure community tribute that sparks heated discussions. Combined with Echo, it forms a “content + capital” dual wheel, exposing projects through podcasts, with Echo providing funding follow-ups. In the future, it will expand to an Apple TV±style service, making content a stickiness engine.
The regulatory moat is the sixth pillar. Coinbase's domestic listing is under the jurisdiction of the SEC, with licenses from multiple states. After the GENIUS Act, the stock price rose by 30%, highlighting the compliance advantages of USDC. Traditional institutions favor it, with JPMorgan collaborating and Chase points converting to Crypto. This barrier is high - Binance/OKX offshore is under pressure, making it difficult for new entrants to cross. Similar to the App Store review, it is strict in the short term, but maintains quality in the long term.
These pillars are not isolated but are in a closed loop, with developers financing through Echo/Liquifi, deploying on Base, acquiring customers via Spindl, gaining exposure through UpOnly, trading on the institutional platform Deribit, custody via Prime, retail credit card consumption, and optimizing data circulation.
Coinbase is not a buying company, it's a weaving net - from issuance to trading, from technology to culture, building an encryption “Apple Empire.”
Layout the next era
If Base and USDC are the current cash cows, the x402 Foundation is Coinbase's bet on the future.
Imagine a piece of HTTP code that has been dormant for 30 years suddenly awakening to become a bridge connecting humanity with the machine economy.
This is not a science fiction novel, but a real scene that unfolded on September 23, where Coinbase and Cloudflare joined forces to establish the x402 Foundation, while Google's AP2 protocol advanced alongside, transforming the HTTP 402 “Payment Required” status code into a machine-native payment process.
The story begins with a clear access path. In the ecosystem of Coinbase, Base acts like an efficient toll booth manager, responsible for low-fee settlements, requiring only $0.001 for each transaction; USDC plays the role of a frictionless universal currency, avoiding the “roadblocks” of exchange rates; and Custody serves as the institutional-grade security “guardian,” handling all bookkeeping.
The core of the protocol is the revival of HTTP 402, a dormant code for many years, which has now transformed into the “highway” for AI payments. Imagine an AI agent crawling through Cloudflare's CDN data, encountering a 402 response along the way; it won't stop but will automatically initiate a USDC payment, confirming it in an instant, and continue to retrieve content, all without human intervention.
The collaboration lineup is truly star-studded, with initial partners including Google (debuting with AP2), Adyen, Paypal, Mastercard, as well as developer platforms like Etsy and Service Now.
The pilot phase has begun, and Cloudflare's Agents SDK has integrated x402 first, currently undergoing private testing of the “pay per crawl” model—AI crawlers eagerly access massive amounts of pages, with fees settled daily.
Google's AP2 has expanded x402, supporting a hybrid payment system of credit cards and stablecoins, with the first batch of B2B procurement pilots landing in the Cloud Marketplace, involving Intuit and Salesforce.
Coinbase acts as the “bridge architect” of Crypto here: x402 settles through Base, while AP2's Mandates (digital contracts) serve as smart sentinels, ensuring that every step of authorization and auditing is watertight.
Why does AI need this “payment script”? Because AI agents are about to “learn to spend money for you.”
Currently, AI like ChatGPT is still in the era of humans placing orders and making payments, but in the future, they will autonomously shop or subscribe to services, requiring a reliable payment framework.
AP2's Intent/Cart Mandates act as a “plot twist” against fraud, allowing users to pre-sign budgets and agents to generate shopping carts, making the entire process traceable.
x402 is the “peak” of Crypto injecting instant settlement, avoiding bank delays with stablecoins. Gartner predicts that the AI payment market will soar to trillions by 2030, with Crypto accounting for 10% of the share.
For Coinbase, the result of this story is that Base benefits from low-fee bonuses.
Epilogue
Ten years ago, Coinbase started by facilitating human transactions and even raised funds in China, coming and going through wind and rain.
Ten years later, it looks more like laying a network underground, with Base for settlement, low cost and high efficiency; USDC for clearing, stable circulation; Echo for issuance, upstream positioning; x402 connects to “money-spending machines” at the far end.
This Q3 financial report is a milestone, with total revenue of $1.87 billion and a net profit of $433 million, but behind the numbers lies the empire blueprint—from volatility dependence to stable rental income; from an exchange to a full-stack hub.
The future of encryption is not about betting on prices, but about building infrastructure. Coinbase's ambition, much like the Roman road network, connects everything. In the next decade, when AI agents are running all over the streets, Coinbase may well be the “Federal Reserve of the digital economy.”
But don't forget, empire expansion always has its borders — regulation, competition, black swans. Investors, hold on to your chips, this show has just begun.
