Coinbase significantly expanded its Bitcoin reserves during the third quarter, adding 2,772 BTC as the company intensifies its Bitcoin strategy and pursues its goal of becoming an "Everything Exchange." The exchange's Bitcoin holdings have now reached 14,548 BTC, with a current valuation of $1.57 billion, according to its Q3 report.
The company reported a substantial increase in net income, which grew over fivefold year-on-year to $432.6 million. Total revenue also saw a significant rise of 55% from the previous year, reaching $1.9 billion. This growth was primarily driven by transaction revenue, which climbed to $1.05 billion. Subscription revenue, encompassing stablecoin income and blockchain rewards, increased by 34.3% year-on-year to $746.7 million.
Coinbase highlighted its continued expansion across various business verticals as part of its strategy to establish itself as an "Everything Exchange." The company stated in its report that it made progress in Q3 by increasing the number of tradable spot assets, broadening its derivatives offerings, and continuing to develop the infrastructure for additional key services.
A crucial element of Coinbase's "Everything Exchange" strategy involves promoting the adoption of stablecoins, such as Circle's USDC, alongside tokenized stocks, prediction markets, and early-stage token sales.
The positive Q3 financial results were met with optimism in the market. Coinbase's shares (COIN) saw a 2.84% increase in after-hours trading, following a nearly 5.8% decline during regular trading hours on Thursday.
Coinbase Continues to Generate Significant Institutional Revenue
The acquisition of $299 million worth of Bitcoin underscores Coinbase's dedication to accumulating BTC as a long-term asset. Additionally, the company provides custody services for institutional asset managers offering spot Bitcoin exchange-traded funds.
Institutional revenue remains a dominant factor in Coinbase's trading activity, accounting for 80% of the $295 billion trading volume in Q3. The company's assets under custody also surpassed $300 billion, reaching a new all-time high.
Notably, Ether's (ETH) share of Coinbase's transaction volume reached 22%, nearly matching Bitcoin's 24%. This represents a significant increase from previous quarters, where Ether's share was less than half that of Bitcoin.
Adoption on Base Continues to Grow
Activity on the Ethereum layer 2 network Base saw increased engagement across trading, payments, lending, and social applications throughout the third quarter. Coinbase also introduced Flashblocks, a feature designed to preconfirm transactions and enable block times of 200 milliseconds.
During the earnings call, Coinbase CEO Brian Armstrong did not provide specific updates on the company's progress regarding the potential launch of a Base token.