Unexpectedly, on October 30, Coinbase disclosed a decrease in its quarterly revenue, indicating a drop in cryptocurrency trading activity among its users during the summer months.
The latest report reveals that the platform’s revenue decreased to $1.2 billion in Q3 2024, down from $1.45 billion in the previous quarter. Despite this decline, Coinbase managed to achieve a noteworthy turnaround with a $75 million profit, a substantial improvement compared to the $2 million loss reported in the previous year.
Concerns Arise Over Coinbase’s Q3 Revenue
Coinbase witnessed a 27% decline in transaction fees compared to the prior quarter, primarily due to the diminishing trading volumes. The company’s shareholder communication highlighted the persistent challenges in the market, with a 7% decrease in subscription and services revenue, totaling $556.1 million for the quarter. This revenue includes earnings from services like stablecoins, staking, and leverage for Prime traders.
In its shareholder update, the company stated,
“Our focus is on driving revenue growth through the introduction of new products such as derivatives, expanding internationally, offering custody services, and further integrating USDC into the cryptocurrency economy.”
Despite the revenue challenges, Anil Gupta, the Vice President of Investor Relations at Coinbase, expressed optimism during a recent discussion, emphasizing the company’s fourth consecutive profitable quarter.
“The business had a solid quarter, aligning with our key objectives set at the beginning of the year: boosting revenue, enhancing crypto functionality, and advocating for regulatory clarity.”
Analysis of Coinbase’s Stock Performance
In March, Coinbase’s stock hit a peak of $279 triggered by Bitcoin’s record high price of nearly $73,000. The stock price has slightly retreated to $211 as of the end of October, although it still shows a 35% increase year-to-date. Subsequently, the company’s stock witnessed a further decline in after-hours trading, dropping to $202.
As of the latest data, Bitcoin was valued at $72,288.21 after a modest 0.37% decrease in the last 24 hours. Simultaneously, Coinbase’s shares were trading at $211.74, marking a 3.61% decline at the time of reporting.
Future Outlook and Expectations
Analysts at Oppenheimer predicted a decline in Coinbase’s trading volume following the absence of robust market drivers and uncertainties surrounding the upcoming elections. Despite the cautious approach, optimism persists, particularly with VP Kamala Harris endorsing a regulatory framework for digital assets, potentially boosting Coinbase’s trading activity in Q4 and offsetting the recent slowdown.
Additionally, the company’s introduction of a $1 billion stock repurchase program reflects its positive long-term outlook, designed to reward its investors. Coinbase’s stablecoin revenue showcased growth, particularly with USDC, driven by platform incentives and expanded product integrations.
In the realm of politics, Coinbase is reaffirming its support for pro-cryptocurrency policies by contributing $25 million to Fairshake PAC, aiming to endorse crypto-friendly candidates in the upcoming 2026 elections, strengthening its role in influencing favorable regulatory outcomes for digital assets.