Coinbase Global Inc. reported $719 million of net income for the third quarter, up 66% from a year earlier. It reported $78 million of adjusted net income in the same release. The distance between those two lines is the most informative thing the company published on Oct. 29.
The gap is accounting, and the company is explicit about what it strips out. Coinbase adjusts for gains and losses on the crypto assets it holds and on derivative positions tied to them, along with other non-operating items. In a quarter when token prices rose, that treatment produces a headline profit far above the cash the business generated. The adjusted figure, near $78 million, is the better guide to how the quarter actually went.
The rest of the release supports that reading. Adjusted EBITDA was $333 million, up 60% from the second quarter and positive for a 15th consecutive quarter. Revenue growth came from prediction markets and derivatives. Spot trading volumes were weak.
For most of its history as a public company, Coinbase’s income statement was a bet on retail speculation, and the bet only paid in one direction. Fees on spot trades peaked in quarters when tokens moved and collapsed when they did not; the company lost money in 2022 and cut 18% of its staff in January 2023. The model was cyclical by construction, and management has spent three years trying to build a second one next to it.
The second model is visible in the mix now. Subscriptions and services include revenue from USDC, the stablecoin Coinbase co-founded and shares economics on, custody fees, staking and a membership product, Coinbase One, whose subscriber count the company said reached a record in the quarter. Derivatives sit between the two halves: futures through its own U.S. venue, and options through Deribit, the offshore exchange it agreed in 2025 to buy for about $2.9 billion.
Prediction markets are the newest piece and the least proven. The product line did not exist at Coinbase a few years ago; it exists now because a federal appeals court allowed Kalshi to list event contracts in the United States in 2024, opening a regulated path for wagers on elections, sports and economic data. Coinbase and its rivals have rushed into that path, and the fees are transaction fees by another name, but on contracts whose volume depends on news cycles rather than on token prices.
That is the argument for the shift: different cycles, not no cycles. A user who trades an options contract on bitcoin’s volatility, or a contract on a jobs report, is still paying a fee for a view about the future. What changes is the correlation. Spot volumes rise and fall with the price of bitcoin; derivatives volumes rise when volatility rises, in either direction; prediction market volumes rise around events. Spreading revenue across three clocks makes the quarterly number less dramatic and more durable.
The stablecoin line has a clock of its own, and it is not one Coinbase controls. Revenue from USDC is essentially a share of the interest earned on the reserves backing the token, which means it tracks short-term rates. Every quarter the Federal Reserve holds rates steady, that revenue is stable; every quarter it cuts, that revenue compresses, and no amount of subscription growth offsets it one for one. It is the most reliable line in the business and the one most exposed to a decision made elsewhere.
Costs are the other half of the EBITDA streak. Coinbase has kept expenses roughly flat in dollar terms through two years of revenue growth, which is what a 15-quarter run of positive adjusted EBITDA looks like from the inside. Headcount is far below its 2022 peak. Marketing spending is tied to product launches rather than to customer acquisition in the way a retail brokerage would run it.
Competition has changed shape as well. The arrival of spot bitcoin exchange-traded funds in January 2024 moved a share of institutional exposure off exchanges and into fund wrappers, where Coinbase earns custody fees rather than trading fees. Offshore venues take the high-frequency flow. Retail brokers with existing accounts take the casual buyer. The company’s answer has been to sell more products to the customers it already has, which is why Coinbase One and the derivatives venue matter more than the headline volume number.
Regulation remains the swing factor. Congress has spent two years on market-structure legislation that would divide oversight of digital assets between the securities and derivatives regulators and set rules for which tokens count as commodities. Passage would widen the list of products Coinbase can offer U.S. customers without legal risk; failure leaves the company’s expansion dependent on agency discretion and court rulings, which is how the prediction market line got here in the first place.
The balance sheet gives it room to wait. Coinbase holds customer funds separately from corporate cash, and its own treasury has been managed conservatively since 2022, when the collapse of a rival exchange made custody practices a selling point rather than a footnote.
None of this makes the quarter a clean win. Spot volumes were soft, and soft spot volumes are still the largest single input to gross profit. The derivatives and prediction businesses are younger, smaller and, in the case of event contracts, still subject to litigation that could end them.
What the quarter does show is a company that has found revenue which does not require a retail mania to exist. Whether it has found revenue that survives a calm market is the question the next two quarters will settle, and the answer will show up in the split between the $719 million line and the $78 million one.
