📢 Flash
Analysis: Stablecoins, Payments, and Prediction Markets Emerge as New Growth Drivers for Crypto Firms—But Profitability Remains a Challenge
On November 6, Coinbase, Robinhood, and Circle released their latest earnings reports, revealing that although they continue to advance new business initiatives, they remain constrained by the cyclical volatility of the crypto market. Coinbase’s Q3 trading revenue totaled $590 million, down 23% year-on-year, while retail spot trading volume declined 9% quarter-on-quarter; Robinhood concurrently confirmed pressure on crypto trading revenue. StoneX analyst Mark Palmer noted that approximately 60% of Coinbase’s current net revenue now stems from recurring businesses or activities not directly driven by spot trading—this report helps shift the market’s entrenched perception of Coinbase as merely a “crypto trading volume leverage tool.” However, Clear Street analyst Owen Lau emphasized that the earnings beat was primarily attributable to cost reductions rather than a rebound in trading activity. Barclays reiterated that reliance on spot crypto trading remains a core concern and, citing weak guidance for Q4, lowered Coinbase’s target price from $149 to $120.
For Circle, Q3 reserve revenue stood at $658 million, down 8% year-on-year; as of end-September, USDC supply totaled approximately $73.9 billion, essentially flat year-on-year. Total company revenue reached $865 million, up 17% year-on-year—but $182 million of this came from the Arc blockchain token pre-sale, a one-time item. Excluding that amount, revenue actually declined about 8% year-on-year. Although stablecoin operations continue expanding, they face narrowing margins: the average USDC balance on Coinbase rose to a record $22 billion, but reward expenditures to maintain and attract that balance rose in tandem; after deducting rewards, stablecoin revenue increased only 3% quarter-on-quarter and fell roughly 16% year-on-year. Lau commented that stablecoins remain Circle’s most sustainable business segment, yet the margin contribution per additional dollar of USDC balance continues to decline.
Meanwhile, new business scale continues growing: Circle disclosed USDC transaction volume reached $13.9 trillion, up 49% year-on-year; its payment network’s annualized transaction volume stood at $41.3 billion. Coinbase expects its daily active users in the market to grow over 60% quarter-on-quarter; annualized revenue from this business has surpassed $200 million, and it forecasts markets and derivatives combined will contribute roughly one-quarter of trading revenue. Leveraging dual drivers—stablecoins and prediction markets—Oppenheimer analyst Rayna Kumar raised Coinbase’s target price to $207; however, Compass Point analyst Ed Engel cautioned that while prediction markets show strong growth, unit economics remain low; Clear Street also noted that the payment business has yet to generate meaningful revenue for Coinbase.
For Circle, Q3 reserve revenue stood at $658 million, down 8% year-on-year; as of end-September, USDC supply totaled approximately $73.9 billion, essentially flat year-on-year. Total company revenue reached $865 million, up 17% year-on-year—but $182 million of this came from the Arc blockchain token pre-sale, a one-time item. Excluding that amount, revenue actually declined about 8% year-on-year. Although stablecoin operations continue expanding, they face narrowing margins: the average USDC balance on Coinbase rose to a record $22 billion, but reward expenditures to maintain and attract that balance rose in tandem; after deducting rewards, stablecoin revenue increased only 3% quarter-on-quarter and fell roughly 16% year-on-year. Lau commented that stablecoins remain Circle’s most sustainable business segment, yet the margin contribution per additional dollar of USDC balance continues to decline.
Meanwhile, new business scale continues growing: Circle disclosed USDC transaction volume reached $13.9 trillion, up 49% year-on-year; its payment network’s annualized transaction volume stood at $41.3 billion. Coinbase expects its daily active users in the market to grow over 60% quarter-on-quarter; annualized revenue from this business has surpassed $200 million, and it forecasts markets and derivatives combined will contribute roughly one-quarter of trading revenue. Leveraging dual drivers—stablecoins and prediction markets—Oppenheimer analyst Rayna Kumar raised Coinbase’s target price to $207; however, Compass Point analyst Ed Engel cautioned that while prediction markets show strong growth, unit economics remain low; Clear Street also noted that the payment business has yet to generate meaningful revenue for Coinbase.
