Coinbase Q3 earnings: what to watch after Robinhood's crypto slump

Coinbase reports third-quarter results after the US market close on Thursday, Oct. 29, and Wall Street cannot agree on how much the September trading pickup helped. The stakes rose after Robinhood said its crypto transaction revenue fell 55% from a year earlier, CoinDesk reports. Here is what to watch.

Robinhood's warning shot

Robinhood's Q3 filing shows crypto revenue of $120 million, down from $268 million a year earlier, though up from $100 million in the second quarter. Customers traded about $50 billion of crypto, down 38%, split between the Robinhood app and Bitstamp, according to Decrypt. Event contracts, by contrast, brought in $173 million, more than six times the year-earlier figure; our explainer on prediction markets covers how those contracts work. Total net revenue rose 12% to $1.42 billion, while net income fell 14% to $476 million.

Trading volume: forecasts far apart

Activity picked up in September after hitting multiyear lows in June, but analysts differ on the size of the rebound:

• JPMorgan (overweight): $173 billion of trading volume.
• Barclays (underweight): $147 billion.
• Oppenheimer (outperform): $141 billion, after cutting its volume forecast by 20%.

Barclays also noted that September's pickup in spot volume appeared to fade in early October.

Revenue and EBITDA ranges

Those volume calls translate into transaction revenue estimates of $578 million to $694 million and total revenue of roughly $1.2 billion to $1.4 billion. For adjusted EBITDA, JPMorgan expects $323 million, Barclays $360 million and Oppenheimer $262 million.

Stablecoin income as a cushion

Coinbase earns a share of the interest on reserves backing Circle's USDC. JPMorgan expects about $320 million of stablecoin revenue for the quarter, income that does not depend on customers trading. Lower rates or more competition could squeeze it; that is why the Fed's decision on Wednesday to hold rates at 3.75%–4% matters to the stock. Coinbase also just added Ripple's RLUSD across its platforms.

Derivatives and the Deribit test

Coinbase bought Deribit, the largest crypto options exchange, to diversify beyond spot trading. Recent numbers are mixed: Barclays says Coinbase International's futures volume fell 12% from the second quarter, while Deribit's combined options and futures volume rose just 2%.

Pricing pressure across brokers

"We've been tracking every broker/exchange that has reported Q3 and the obvious weak link is pricing," VanEck's Matthew Sigel wrote on X, pointing to Robinhood's weak pricing power. That matters for Coinbase because its retail customers have historically paid more per dollar traded than institutions. Fee differences between platforms are one reason some traders move to on-chain venues; see centralized vs decentralized exchanges.