Headwinds, tailwinds for Coinbase ahead of Q3 earnings

While analysts expect the exchange to again report quarter-over-quarter trading volume declines, bitcoin ETF buzz could offer tailwinds moving forward


rarrarorro/Shutterstock modified by Blockworks


Coinbase is likely to reveal this week that economic challenges persisted in 2023’s third quarter, though potential positive regulatory developments could ultimately offer tailwinds for the company.  

Executives are set to report the company’s latest quarterly financial results Thursday. Coinbase suffered quarter-over-quarter declines in trading volumes and net revenue from April to June, as previously disclosed.

Read more: Coinbase’s situation ‘tenuous’ despite ‘better than feared’ Q2 results

Despite those second-quarter weak points, the exchange’s adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — remained positive for a second straight quarter as the company reduced operating expenses by 13%.

Adjusted EBITDA will continue to be a metric to watch, according to Owen Lau, executive director at Oppenheimer & Co. 

Potential challenges endured in Q3

Expected low trading volumes and declining USDC market capitalization during the third quarter could limit upside potential, Lau added. Oppenheimer analysts expect trading volumes to dip by 16% quarter over quarter to $77 billion in the third quarter. 

“Trading volume is weak but it is likely priced in already,” Lau told Blockworks. 

Coinbase’s stock price was $74.54 at 10 am ET on Tuesday — up 121% year to date, but down about 1% in the last month.

The market capitalization of USDC — a stablecoin from which Coinbase earns interest income — had dropped from about $30 billion to $26 billion from June 30 to Sept. 30, Lau noted.

Morningstar equity analyst Michael Miller told Blockworks he expects it to be a “quieter quarter” given that crypto market conditions were similar in the second and third quarters. 

“Coinbase probably won’t announce any more cost cutting, at least not at the scale we’ve seen in other quarters,” Miller added. “We will also probably see more stability in Coinbase’s interest income as USDC market capitalization was more stable during the third quarter and the bleeding has started to slow.”

Still, the company’s legal battle with the US Securities and Exchange Commission will continue to impact Coinbase — and its stock — “as its relationship with the regulator has really broken down this year,” Miller said. 

The SEC sued the crypto exchange in June for alleged securities violations — charges the company has refuted. Coinbase has sought to have the ongoing lawsuit dismissed.

“Any comments they make regarding their regulatory issues would be important, but I honestly don’t expect anything substantive here since it is an ongoing legal issue at this point,” Miller said. 

Coinbase tailwinds?

Grayscale Investments’ court victory against the SEC, as well as what many viewed as a partial legal win for Ripple Labs against the regulator, bode well for Coinbase in its fight with the SEC, according to Lau. 

Momentum around the potential approval of spot bitcoin ETFs could also offer a lift to the exchange, analysts said. 

Bitcoin has rallied in recent weeks as issuers seeking to launch such a product have been amending filings — signaling apparent dialogue with the SEC. 

Read more: Is bitcoin’s ETF-fueled rally to $35K premature? Well, maybe

Some industry watchers have said Grayscale’s legal win has left the SEC with less room to continue denying spot bitcoin ETFs. The crypto-focused asset manager said last week it intends “to move as expeditiously as possible” to convert its Grayscale Bitcoin Trust (GBTC) to an ETF.

“I will also have an eye out for any commentary Coinbase gives about its October volume and monthly user base to see what impact the recent ETF news has had on their business and trading volume,” Miller said.

Coinbase continued to expand overseas in the third quarter, with executives saying they are seeking support from “forward-looking regulators” to expand products internationally. The company chose Ireland as its European Union hub before the region’s Markets in Crypto Assets (MiCA) regulation gets implemented next year.

“Longer term, international expansion, US derivatives trading, higher staking and Base could gradually add more incremental revenue outside spot trading,” Lau said.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research



Akash is a general-purpose compute platform with GPUs, storage, LLM training or inference, and validator hosting through its two-sided marketplace.


The SEC could allow half a dozen or more such funds to launch at once, Ark Invest CEO says


2023 saw a decline in a16z crypto funding, but the behemoth VC firm teased what it’s excited for next year


“Iran Unchained” launched a new version of its grant platform to make donations to activists easier


The stablecoin marks the first time a regulated European bank has made a euro-pegged stablecoin available on a crypto exchange


Build it and they will come, perhaps, but making crypto easier to use is turning out to be just as important


Amid moves by Itau Unibanco and Nubank, the country could serve as “a proof of concept” for TradFi-crypto integrations, industry research exec says