Coinbase’s Trading Volume Plummets 36.4% to 21st in Market Activity Despite USD1 Integration and Institutional Push

On August 25, 2025, Coinbase Global (COIN) closed with a 4.33% decline, its trading volume reaching $2.62 billion—36.4% lower than the previous day’s figure and ranking 21st in overall market activity. The drop followed mixed signals from recent developments, including the integration of World Liberty Financial’s USD1 stablecoin and strategic partnerships aimed at expanding institutional adoption.

Coinbase added USD1, a U.S.-backed stablecoin backed by reserves, to its platform, broadening its stablecoin ecosystem and aligning with growing institutional interest in blockchain-based assets. The move, however, does not directly address ongoing challenges in spot trading volumes, which remain a key revenue driver. Meanwhile, a partnership with PNC Bank highlights Coinbase’s push for institutional credibility, potentially enhancing long-term growth prospects as blockchain infrastructure integrates with traditional finance.

The company’s acquisition of Deribit for $2.9 billion underscores its ambition to strengthen derivatives and tokenization services. Despite these efforts, analysts note that persistent weakness in trading activity and rising cybersecurity costs could pressure short-term performance. Valuation analyses suggest a fair value of $366.92 per share, indicating undervaluation relative to analyst forecasts, though a discounted cash flow model presents a more cautious outlook, questioning the sustainability of projected cash flows.

Backtesting results for a high-volume trading strategy (2022–2025) showed a compound annual growth rate of 6.98%, with a maximum drawdown of 15.46% recorded in mid-2023. The strategy demonstrated steady growth but emphasized the need for risk management in volatile markets.