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1. What are the Coinbase earnings expectations for Thursday?
Coinbase earnings expectations are split ahead of the exchange's third-quarter report, due after the market close on Thursday, October 29. Analysts at JPMorgan, Barclays and Oppenheimer forecast trading volume between $141 billion and $173 billion, and total revenue of roughly $1.2 billion to $1.4 billion, as investors look for proof that crypto trading is genuinely recovering.
Trading activity rose in September after sinking to multiyear lows in June, helped by a rebound in crypto prices. What analysts cannot agree on is how much that improvement lifted Coinbase's results and whether it can last into the months ahead.
The report is closely watched because it is among the first full readings of how the exchange fared after a difficult period for the industry. The estimates quoted here come from three large research desks, and the distance between them shows how unsettled the outlook remains.
2. Why Robinhood's crypto results cast a shadow
Robinhood supplied the most recent warning. The brokerage reported that revenue from crypto transactions fell 55%, with crypto trading volume down 38%. Revenue from options and equities moved higher, and prediction markets generated $173 million, more than six times the amount from a year earlier.
Those figures illustrate how a diversified platform can cushion a weak crypto quarter. When one product line slumps, others can pick up some of the slack, and Robinhood had several lines doing so.
Coinbase is positioned differently. A large share of its revenue still comes from customers buying and selling digital assets, and unlike a traditional broker with steady income from interest and investment products, it is highly sensitive to the swings of crypto prices. When prices drop, volumes tend to shrink, and fee revenue shrinks with them. That sensitivity is the reason a competitor's crypto decline draws so much attention in the run-up to Coinbase's own numbers.
Prediction markets, in which users trade contracts tied to the outcome of events, were the standout at Robinhood. Their growth to $173 million shows that retail enthusiasm has not vanished; it has partly moved to products other than digital assets, a shift that a pure crypto exchange cannot easily replicate.
3. Where Wall Street forecasts diverge
Expectations for the trading business itself are improving but far from uniform. Analysts broadly expect Coinbase to do better than in the second quarter, yet they differ on how much revenue that recovery produces.
JPMorgan, which rates the stock overweight, holds the most optimistic view, projecting $173 billion in trading volume for the quarter. Barclays is lower at $147 billion, and Oppenheimer lower still at $141 billion. Translated into revenue, the implied transaction income ranges from $578 million to $694 million, and total revenue estimates stretch from about $1.2 billion to $1.4 billion.
The spread between the forecasts is wide, and it means the reported figure could come in above some estimates and below others even if the quarter proves roughly in line with the general trend.
Profit forecasts add a twist. For adjusted EBITDA, a measure of operating earnings that excludes items such as interest, taxes, depreciation and amortization, JPMorgan expects $323 million, Barclays $360 million and Oppenheimer $262 million. Barclays carries an underweight rating, yet it has the highest EBITDA estimate of the three, which shows that a cautious rating does not necessarily mean a pessimistic quarterly forecast. Oppenheimer rates the stock outperform.
The connection between volume and revenue is straightforward. An exchange earns a fee on each trade, so dividing the implied transaction revenue by the forecast volume gives an effective rate of roughly 0.4% in both the low and high cases. Because that rate is similar across the forecasts, nearly all of the difference in revenue estimates comes from differing views on how much customers traded, not from different assumptions about pricing.
4. How Coinbase makes money from trading
Understanding why these estimates matter requires a look at how an exchange earns revenue. Coinbase charges customers a fee each time they buy or sell a cryptocurrency, and it collects more when more people trade and when the assets they trade are priced higher. Both variables tend to rise and fall with the market's mood.
In a strong market, rising prices attract new customers and encourage existing ones to trade more often, so revenue climbs quickly. In a weak market, the same effect works in reverse, and the exchange can see activity dry up within weeks. That feedback loop explains why analysts treat quarterly trading volume as the single most important number on a Coinbase earnings report.
It also explains why the multiyear low in June followed by the September improvement is being scrutinized so closely. A recovery that began only late in the quarter contributes less to the total than one that built steadily from the start, and a rebound that fades early in the next quarter may not carry through to the following results.
5. Did the September rebound in trading hold?
The evidence so far is mixed. Barclays said the pickup in volume that appeared in September seemed to fade during the early part of October, which would weigh on any quarter-end momentum.
Oppenheimer responded to the same weakness by cutting its trading volume forecast by 20%. All of the analysts agree on one point: Coinbase remains heavily exposed to the ups and downs of crypto trading, and its quarterly results will continue to reflect them closely.
6. Stablecoin income as a cushion
One part of Coinbase's revenue does not depend on customers placing trades. The company receives a share of the income generated by the reserves backing USDC, the dollar-pegged stablecoin issued by Circle Internet. Because those reserves earn interest whether or not markets are active, the income tends to be steadier than trading fees.
JPMorgan expects $320 million in stablecoin revenue for the quarter, a sum that would help offset softer trading if volumes disappoint.
The cushion has limits. Lower interest rates would reduce the returns on the reserves behind USDC, trimming the income that flows to Coinbase. Competition among stablecoin issuers and distributors could also squeeze the exchange's portion of that revenue over time.
Stablecoins such as USDC are designed to hold a steady value against the dollar, and the issuer backs each token with reserve assets. Those assets generate interest, and the issuer shares part of that income with distribution partners. For Coinbase, this arrangement turns a product that customers hold into a source of recurring revenue that does not require them to trade at all.
7. How are Coinbase's newer businesses performing?
Analysts are also examining Coinbase's push into derivatives, payments and tokenized assets, areas intended to reduce its reliance on spot trading. Its acquisition of Deribit, the largest crypto derivatives exchange, strengthened its position in options, a segment popular with professional traders.
The latest signs are uneven. Barclays reported that futures volume at Coinbase International fell 12% from the second quarter, while the combined options and futures volume at Deribit rose only 2%. Neither number suggests the derivatives push is offsetting weakness elsewhere with much force.
8. Why the rating does not always match the forecast
Brokerage ratings such as overweight, underweight and outperform express an analyst's view on how a stock may perform relative to the market or its peers. They reflect valuation, growth prospects and risk, not only the coming quarter, which is why an analyst can rate a company cautiously while still expecting solid near-term earnings.
That helps to explain the Barclays position. The firm projects the highest adjusted EBITDA of the three banks while holding an underweight rating, and its skepticism centers on the longer-term question of whether Coinbase can diversify beyond retail trading and USDC income. The near-term quarter and the long-term thesis are distinct judgments.
For investors reading the results, the practical lesson is to separate the two questions. One is whether Coinbase meets or beats the quarterly numbers; the other is whether the mix of its revenue is shifting in a way that makes future earnings less dependent on the price of digital assets.
9. Is weak pricing power an industry-wide issue?
Concern is not confined to one company. Matthew Sigel, head of digital assets research at VanEck, said Robinhood's results point to a wider problem across brokers and exchanges. In his view, pricing is the weak link among the firms that have reported third-quarter results so far.
Sigel said Robinhood displayed weak pricing power in options, equities and crypto alike, as fee pressure made it hard to convert customer activity into revenue. The point has particular relevance for Coinbase, because retail customers have historically produced more revenue per dollar traded than institutional clients. If fee pressure bites hardest among retail traders, the exchange's most profitable customers are the ones affected.
Base is a network built to host applications and payments on top of Coinbase's infrastructure, while tokenization refers to representing traditional assets, such as stocks or funds, as tokens that can move on a blockchain. JPMorgan's constructive view on these areas rests on the idea that they can add revenue streams that do not rise and fall with crypto prices.
10. What to watch after the report
The longer-term outlook is where analysts disagree the most. JPMorgan sees opportunity in tokenization, payments and Base, Coinbase's blockchain network, and views these as potential engines of growth. Barclays is skeptical that the newer businesses can offset the company's dependence on retail trading and USDC income.
Results arrive after the close on Thursday, October 29. Investors will compare the actual trading volume, transaction revenue and stablecoin income against the ranges above, and listen for any comment on whether October's softer trading has continued. Those details will probably shape whether the market adopts the more optimistic or the more cautious reading of the exchange's prospects.