Coinbase is racing to stay ahead of a wave of new competitors as it pivots from being a pure crypto exchange to a broader financial services platform.
Key Takeaways:
- Coinbase is expanding beyond trading into custody, derivatives, and stablecoins as competition intensifies.
- Despite strong ETF custody revenues and new ventures, Coinbase remains heavily exposed to Bitcoin price swings.
- Trading fees, still the core of Coinbase’s revenue, rise and fall with crypto market volatility.
With Bitcoin hitting record highs and US regulation creating fresh momentum for institutional adoption, the company faces growing pressure from both traditional finance and emerging crypto players, according to a new report from the Financial Times.
Coinbase’s UK Crypto Ad Rejected Amid Push to Broaden Services
In July, Coinbase launched a high-budget TV ad in the UK that framed cryptocurrency as a solution to a failing financial system.
The ad was rejected for not meeting broadcast standards due to a lack of risk warnings.
The campaign came as the exchange seeks to expand beyond trading into custody, payments, asset management, and derivatives.
Founded in 2012, Coinbase entered the S&P 500 this year and now boasts a market cap of $83 billion.
Its shares have surged 70% since Donald Trump’s election, thanks in part to his administration’s crypto-friendly stance.
However, second-quarter earnings disappointed, and the stock dropped 15%, signaling investor caution.
A growing concern is the company’s exposure to the price of Bitcoin. Trading fees, still the core of Coinbase’s revenue, rise and fall with crypto market volatility.
Fee compression and competition from Asian exchanges are also eating into its margins.
Coinbase has secured its position as custodian for eight of the top 11 US Bitcoin ETFs, earning $43 million in the last quarter of 2024 from that alone.
However, new legislation could open the door for traditional custodians like State Street and BNY Mellon to enter the market, threatening Coinbase’s dominance.
The firm is also eyeing tokenized stock trading and small business banking services, while leaning heavily into stablecoins and staking.
Revenues from its USDC stablecoin partnership with Circle now trail only trading, while staking offers high-margin returns and defensibility.
In its boldest move yet, Coinbase acquired crypto derivatives platform Deribit for $2.9 billion, signaling its intention to dominate that space.
The company has also partnered with banks like JPMorgan and PNC to bridge crypto and traditional finance.
Despite its expansion, analysts say Coinbase’s fortunes remain tightly tethered to Bitcoin’s price.
TIME Names Coinbase a 2025 ‘Disruptor’ Among Most Influential Companies
As reported, TIME has recognized Coinbase as one of 2025’s 100 Most Influential Companies, labeling the crypto exchange a “disruptor” for its significant role in shaping US digital asset policies and markets.
TIME noted the exchange as a key driver behind the industry’s policy efforts and predicted Coinbase could become the central hub for crypto trading in the US.
Beyond the US, Coinbase is broadening its reach in Europe, securing a license under the EU’s MiCA regulatory framework through Luxembourg’s financial regulator.
Notably, Coinbase also continued its corporate Bitcoin accumulation.
In Q2, the company purchased 2,509 BTC for approximately $222 million, lifting its total holdings to 11,776 BTC and placing it back among the top 10 public holders of the asset, just ahead of Tesla by coin count.
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