Bitcoin News Today: Coinbase Q2 Revenue Drops 26% Amid Crypto Market Downturn, Stablecoin Growth Bright Spot

Coinbase’s Q2 2025 earnings report revealed a complex performance amid a challenging crypto market. Total revenue for the quarter was $1.5 billion, representing a 3.3% year-over-year increase but a 26% decline from the prior quarter, below the expected $1.59 billion. Trading revenue dropped to $764 million, a 2% year-over-year decrease and a 39% fall from the previous quarter, largely driven by weak retail trading activity. Overall trading volume hit $237 billion, down 40% from the prior quarter [1].

Despite these challenges, stablecoin revenue emerged as a key growth driver, reaching $332.5 million—an impressive 12% increase from the previous quarter. The average USDC balance on the platform rose to $13.8 billion, indicating strong demand for stablecoins. Through its partnership with Circle, Coinbase retains 100% of on-platform USDC interest income and 50% of off-platform income, reinforcing its competitive position in the space [1].

Subscription and services revenue remained robust at $655.8 million, up 9% year-over-year. However, Coinbase faced rising operating costs, which reached $1.52 billion in Q2—up 37% year-over-year, including $308 million in cybersecurity costs following a major data breach in May. Adjusted EBITDA was $512 million, a 14% decline year-over-year. Earnings per share (EPS) came in at $5.14, significantly higher than $0.14 in the prior year, but this was largely due to a $1.5 billion gain from Circle’s IPO and $362 million in crypto investment income. Excluding these non-operational gains, the company reported a net loss of $440 million [1].

Coinbase’s cash reserves stood at $9.3 billion, a 6% decline from the previous quarter. The company added 2,509 BTC in Q2, bringing its total BTC holdings to 11,776 BTC, valued at $1.26 billion. Following the earnings report, the stock fell 6% in after-hours trading to $16.70, closing at $314.69. Despite the short-term dip, the stock has risen over 50% this year, outperforming the S&P 500, underscoring investor confidence in Coinbase’s long-term potential [1].

The firm continues to pursue its vision of becoming an “all-assets exchange,” with strategic moves including the launch of new products and the acquisition of Deribit. In Q2, Coinbase acquired Deribit for $2.9 billion, securing 75% of the global crypto options market and $1 trillion in annual trading volume. This significantly boosted its position in the derivatives space. The company also launched perpetual futures, tokenized stocks, prediction markets, and integrated decentralized exchange (DEX) features into its app [1].

Partnerships with major companies like Shopify and PayPal expanded the use of USDC and PYUSD in commerce, while collaborations with JPMorgan Chase and American Express introduced products like Bitcoin rewards credit cards. Notably, XRP contributed 13% of Coinbase’s trading revenue in the quarter—surpassing Ethereum’s 12%—despite accounting for less than 10% of trading volume, highlighting its high profitability [1].

Regulatory developments in 2025 have also favored Coinbase. In February, the U.S. SEC dropped its civil lawsuit against the company, reducing regulatory uncertainty. A White House report titled “Strengthening U.S. Leadership in Digital Financial Technology” further signaled government support for the industry. SEC Chair Paul Atkins also endorsed tokenization, citing its efficiency and transparency, which aligns with Coinbase’s tokenized stock initiatives [1].

Looking ahead, Coinbase remains cautious. The May data breach caused a $307 million direct loss and damaged user trust. The broader crypto market continues to face headwinds, with the market cap (excluding BTC) falling to $950 billion from $1.6 trillion, and venture capital investment reaching its lowest levels since 2017–2018. For July, the company expects trading revenue to reach $360 million, and for Q3, it forecasts subscription and services revenue between $665 million and $745 million [1].

Coinbase’s custodial assets now total $245.7 billion, capturing 80% of the crypto ETF market, reinforcing its leadership in institutional services. As the first digital asset company in the S&P 500, Coinbase’s influence in the financial sector continues to expand. However, challenges remain, including declining trading volumes, rising costs, and ongoing cybersecurity risks. The company is closely monitoring regulatory changes and plans to expand globally while maintaining compliance [1].

Source: [1] Coinbase Q2 2025 Earnings: Strong Stablecoin Revenue Supports Shift Toward “All-Assets Exchange” Strategy (https://coinmarketcap.com/community/articles/68905b8ea62400030f072281/)