Coinbase Awaits Earnings as Robinhood's Crypto Revenue Drops
Investors are watching trading volume, while Robinhood has already reported a steep drop in crypto revenue. The contribution from USDC reserves and Deribit is also in focus.
Key Takeaways
- Coinbase reports quarterly earnings after the market closes on Thursday, while investors are mainly watching for a possible recovery in crypto trading.
- Robinhood reported a 55% drop in crypto transaction revenue and a 38% decline in trading volume, adding to uncertainty in the market.
- Analysts expect mixed results for Coinbase, while stablecoin revenue from USDC could provide extra support.
Coinbase Global reports third-quarter earnings after the market close on Thursday. Investors and analysts are mainly focused on one question: is crypto trading picking up again after a weak stretch for the sector, or is the recovery still fragile?
Trading Recovered in September
Trading activity picked up in September after falling to multi-year lows in June. That came alongside a rebound in crypto prices, but analysts do not agree on how much of that will show up in Coinbase's revenue.
That uncertainty grew after Robinhood Markets' results. The company reported a 55% drop in crypto transaction revenue, while crypto trading volume fell 38%. Robinhood did say crypto revenue rose 20% quarter over quarter to $120 million (€108 million), but the year-over-year decline underscored how choppy the market still is.
Wall Street Sees Different Outcomes
Expectations for Coinbase vary widely. JPMorgan is the most optimistic and expects $173 billion (€155 billion) in trading volume for the quarter. Barclays comes in at $147 billion (€132 billion) and Oppenheimer at $141 billion (€127 billion). That puts their estimates for transaction revenue between $578 million (€519 million) and $694 million (€623 million), while total revenue estimates are roughly between $1.2 billion (€1.1 billion) and $1.4 billion (€1.3 billion).
Estimates for adjusted EBITDA also vary. JPMorgan expects $323 million (€290 million), Barclays $360 million (€323 million), and Oppenheimer $262 million (€235 million). Barclays noted that the rebound in spot volumes at the start of October already seemed to be fading a bit, while Oppenheimer cut its trading volume forecast by 20% because of weaker market activity.
Stablecoins Provide Extra Support
Beyond trading, analysts are watching Coinbase's stablecoin revenue. The company gets a share of the income from the reserves backing USDC, Circle Internet's dollar-pegged token. JPMorgan expects $320 million (€287 million) from that, giving Coinbase a revenue stream that depends less directly on trading volumes.
At the same time, risks remain. Lower interest rates could reduce the yield on USDC reserves, and competition could put further pressure on revenue. Coinbase is also trying to grow beyond spot trading, including with derivatives, payments, and tokenized assets. The acquisition of Deribit gave the company more weight in crypto options, although recent volumes were mixed.
For European crypto followers, this matters because Coinbase still leans heavily on retail trading, while the sector is increasingly looking for more stable revenue sources. The numbers show how sensitive major crypto exchanges still are to swings in trading activity, even as other parts like stablecoins or derivatives get more attention. Coinbase has been trying to reduce that dependence for some time with new products, including derivatives, tokenized stocks, and stablecoin payments.
