Coinbase Posts $719 Million Profit as Prediction Markets Soar
Coinbase reports a $719 million third-quarter profit buoyed by investment gains and surging prediction markets, even as spot trading volumes decline.
Coinbase Posts $719 Million Profit as Prediction Markets Soar
Coinbase reports a $719 million third-quarter profit buoyed by investment gains and surging prediction markets, even as spot trading volumes decline.
Coinbase third-quarter profit and revenue overview
Coinbase returned to a $719 million quarterly profit despite weaker crypto trading, buoyed by its investment gains in Bitcoin according to recent earnings data. The exchange's third-quarter earnings, released on October 29, showed revenue of $1.216 billion, which was largely unchanged from the previous quarter but down 35% year over year.
Chief Financial Officer Alesia Haas noted that the company recorded its 15th consecutive quarter of positive adjusted earnings before interest, taxes, depreciation, and amortization. This metric reached $333 million, representing a 60% increase from the previous quarter. Coinbase successfully reversed a $359 million second-quarter loss as its diversification strategy gained traction across multiple business lines.
Growth in prediction markets and subscription services
Prediction markets have emerged as an increasingly important revenue source for the exchange as sluggish cryptocurrency trading activity weighs on traditional operations. According to the Q3 earnings presentation, prediction markets surpassed $200 million in annualized net revenue during the quarter, following an 82% compound quarterly growth rate since launch.
CEO Brian Armstrong described prediction markets as one of the fastest-growing products in company history, highlighting strong demand for cryptocurrency-related event contracts. Meanwhile, subscription and services revenue increased 3% quarter over quarter to $570 million, representing nearly half of net revenue. Haas noted that these expanding segments made Coinbase more resilient because prediction-market revenue is less correlated to crypto volatility.
Stablecoin business and regulatory developments
While prediction markets provided a new growth avenue, Coinbase's established stablecoin business faced different financial dynamics. The exchange reported a record $22 billion in average USDC balances across its products, marking a 49% year-over-year increase and about 30% of the stablecoin's average circulating supply. However, stablecoin revenue declined slightly by 5.4% to $306.9 million.
To further enhance its offerings, Coinbase plans to expand prediction-market engagement and develop USDC-native clearing infrastructure. Haas stated that the company obtained CFTC approval for its own Derivatives Clearing Organization to support predictions, allowing the firm to own more of the stack, launch proprietary contracts, and improve overall trading economics.
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