Coinbase’s third quarter saw revenue and profit surpass Wall Street expectations, yet the market responded negatively as sales declined sharply compared to last year. Management attributed results to a significant mix shift in trading activity, with strong growth in Prediction Markets and derivatives offsetting declining spot crypto volumes. CFO Alesia Haas noted that, despite a 10% quarter-over-quarter drop in spot trading, the company’s newer products, including Prediction Markets, helped maintain stable overall revenue. CEO Brian Armstrong highlighted increased institutional participation and the expanding use of crypto assets like Bitcoin as collateral, reflecting broader shifts in both user preferences and market structure.

Is now the time to buy COIN? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our top 5 analyst questions from Coinbase’s Q3 earnings call

• Andrew Jeffrey (William Blair) asked whether Prediction Markets are cannibalizing consumer transaction revenue. CFO Alesia Haas replied that Prediction Markets are incremental, with users allocating additional funds rather than shifting away from spot trading.
• Jon Ma (Artemis) questioned the scalability and early adoption of Coinbase Agents. CEO Brian Armstrong explained that agentic volume is growing rapidly, though currently small, and described the agentic economy as a massive future opportunity for the platform.
• Lorenzo Valente (ARK) asked about security and custody risks from AI and quantum computing. Armstrong differentiated between current AI limitations and the longer-term quantum risk, outlining investments in post-quantum security upgrades and industry collaboration.
• Lorenzo Valente (ARK) also asked about monetization of tokenized equities on Base. Haas said sequencer fees are the primary near-term driver, but emphasized that building liquidity and network effects will be key to future monetization.
• Ansem (Market Bubble) inquired about differentiation in the competitive landscape and progress with Deribit. Armstrong highlighted Coinbase’s focus on decentralized finance infrastructure, multi-customer platforms, and Deribit integration as key advantages.

Catalysts in upcoming quarters

In future quarters, our analysts will be tracking (1) growth in Prediction Markets and agentic trading volumes as indicators of product adoption, (2) progress in building liquidity and network effects in tokenized equities and expanded derivatives offerings, and (3) the company’s ability to adapt its security systems to emerging AI and quantum threats. Management’s execution in integrating recent acquisitions and responding to regulatory developments will also serve as important milestones.

Coinbase currently trades at $145.24, down from $160.59 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).

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