Coinbase Earnings Disappointment Mitigated by USDC Interest Income

Coinbase posted lower-than-expected third quarter revenue but beat on earnings per share after the close Thursday, sending the stock whipsawing in after-hours trading. 

The cryptocurrency exchange reported $590 million for the quarter. Analysts had projected $641 million. Transaction revenue — historically Coinbase’s biggest money-maker — was down 44% from the second quarter. 

Coinbase, like competitor Robinhood, benefitted from interest income this quarter. The exchange, which owns stablecoin USDC along with issuer Circle, collects interest payments on the stablecoin’s reserves. With ever-rising rates, the payouts have increased. 

In the second quarter, Coinbase’s interest income increased five times to $32.5 million. In the third quarter, the figure jumped 213% to $101.8 million. 

Monthly transacting users fell to 8.5 million, down from 9 million in the second quarter. 

“Macro conditions deteriorated in Q3, resulting in the daily average crypto market cap and volatility declining 30% and 24% sequentially, respectively,” Coinbase wrote in its shareholder letter. “This drove lower crypto trading volume and a continued shift in our retail customer’s behavior from trading to ‘hodl’ing.’”

The earnings come a day after Coinbase recorded a major departure: Chief Product Officer Surojit Chatterjee said he was leaving the company after about a year and a half. 

“It’s time to get off the ride and catch my breath,” he wrote on LinkedIn Wednesday. 

COIN ended the New York trading session down 8.1%. The stock dropped an additional 2% in after-hours trading on earnings, before bouncing back and rallying 7.5% as of 4:35 ET.

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  • Casey Wagner


    Senior Reporter

    Casey Wagner is a New York-based business journalist covering regulation, legislation, digital asset investment firms, market structure, central banks and governments, and CBDCs. Prior to joining Blockworks, she reported on markets at Bloomberg News. She graduated from the University of Virginia with a degree in Media Studies.

    Contact Casey via email at [email protected]