There are a handful of publicly listed cryptocurrency companies in the United States.
These firms tend to serve as a good barometer of the state of the digital asset industry, at least domestically.
If cryptocurrency exchange Coinbase’s third-quarter 2024 earnings results Wednesday (Oct. 30) were any indication, the use of crypto for speculation is waning, while the utility of crypto within payments is waxing.
“Where our focus has been is building the infrastructure to create an environment where payments will be 10 times better than current options,” Coinbase Chief Financial Officer Alesia Haas told investors during the Q&A portion of Wednesday’s call, adding that the company’s “goal is that actually every finance, every FinTech company, will eventually become a crypto company.”
“The technology is there, but we need to create the user experiences,” she said. “We need to continue to create on-ramps and off-ramps into stablecoins so that people can use them for global payments. We can make the experience more seamless within our products so that we can build better P2P payment opportunities for consumers.”
Still, Coinbase missed Wall Street analysts’ estimates on revenue and earnings, sending the share down single digits. The company reported net income of $75.5 million, or 28 cents per share, compared with a loss of $2.3 million, or 1 cent a share, the same quarter last year.
Read also: Coinbase Widens Access to Crypto B2B Payments
Crypto Trading Volume Takes a Hit Amid Low Asset Volatility
Transaction fees, the primary revenue driver for Coinbase, fell as crypto trading volumes dipped further across U.S. exchanges. Crypto market volatility — a determinant of trading volume — was down by approximately 5% quarter over quarter, the company highlighted in its shareholder letter.
Institutional trading was also affected, with Coinbase reporting Q3 institutional transaction revenue of $55 million, down 13% quarter over quarter. Q3 institutional spot trading volume was $151 billion, down 20% quarter over quarter,
Crypto markets turn quickly, Coinbase noted in its letter, emphasizing the difficulty of navigating such a volatile environment while attempting to expand its revenue streams beyond trading activity alone.
Stablecoin revenue increased to $246.9 million, marking a 2.6% rise quarter over quarter and a 43% increase from the same period last year. USDC, in particular, played a role. Coinbase’s partnership with Circle, which issues USDC, gives it a 50/50 share in the interest income from the reserves backing USDC, the second-largest dollar-backed stablecoin on the market.
With USDC’s market cap growing by more than 45% year-to-date, this revenue stream has become valuable for Coinbase.
See also: Visa Direct Teams With Coinbase for Real-Time Crypto Deposits
Coinbase’s investments in platform incentives and tighter integration of USDC across its product offerings boosted on-platform balances and USDC’s market cap, as stablecoin volumes globally surged over $22 trillion. Coinbase and Circle’s USDC and EURC stablecoins became the first stablecoins to comply with the European Union’s new Markets in Crypto Assets (MiCA) regulatory framework in Q3, positioning them for further adoption within Europe’s crypto ecosystem.
“Our platform incentives, combined with deeper integration of USDC across our products, have been contributors to both market cap and on-platform balance growth,” the company said in the shareholder letter.
It’s all happening as various players in the crypto world are seeking “greater utility — and recognition — across the financial services ecosystem,” as PYMNTS wrote earlier this month.
In its shareholder letter, Coinbase underscored its commitment to driving revenue growth through several strategic avenues: expanding derivatives products; increasing its international footprint; enhancing custody services; and deepening USDC’s integration into the crypto economy.
Coinbase’s partnership with Visa, announced this week, allows debit cardholders to transfer funds instantly to their Coinbase accounts, signaling the company’s drive to improve crypto liquidity and accessibility for a broader user base.
As Coinbase navigates an environment of regulatory pressures, low crypto volatility and slowing trading activity, its pivot toward stablecoin-related services and infrastructure development highlights a potential path forward. With stablecoins seen as a promising area for broader adoption — especially given their compliance with the EU’s MiCA regulations — Coinbase is positioning itself as a leader in crypto-enabled financial solutions that span beyond trading.
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