Coinbase is down -10% year to date and more than 50% from its all time highs. Brian Armstrong, its CEO, is at least 3 years too late in rolling out stock trading on its platform. And to add insult to injury, Coinbase still retains a 0.59 correlation to Bitcoin price movement \[1\].
So what does the future of Coinbase actually look like? Will Bitcoin BTC continue to dictate price action? Or will we finally see some decoupling?
Let's unpack everything in plain-English for the curious investor. I hold about 10% of my portfolio in Coinbase.
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Coinbase has three primary core offerings:
1. Trading Exchange
2. Custodianship & Payments Infrastructure
3. Subscription and Services Platform
# Trading Exchange
Coinbase started with offering intuitive and seamless digital asset trading and now has evolved its product offering to include stocks and prediction markets. The Everything Exchange offered by Coinbase is its biggest revenue driver. The company earns fees from crypto and stock trades on its platform which it considers transaction revenue.
For FY2025, transaction revenues accounted for $4.1B revenue or 57% of its total revenue \[2\]. Robinhood launched commission-free stock trading in 2013. By the time Coinbase had 9.7 million monthly active users during the 2020-2021 bull run, Robinhood already had 22 million funded accounts and owned the "investor" identity for an entire generation of retail traders \[3\].That same generation is Coinbase's core user base. Coinbase had them captive, pampered with crypto gains, and hungry for the next trade. That was the window to become the everything app and Coinbase spent it collecting transaction fees instead.
Here's the problem with being late: Robinhood is added crypto as a feature to a platform people already use for stocks. Coinbase is adding stocks as a feature to a platform people associate with crypto. Those are not the same repositioning challenge. Coinbase isn't trying to steal Robinhood's users but it is trying to keep its own from leaving when crypto goes cold. That's a more honest framing of what stock trading actually does for Coinbase. The risk is that Coinbase spent the 2021 bull market printing money on transaction fees instead of using that capital and user attention to lock in the multi-asset habit.
# Custodianship & Payments Infrastructure
It's how Coinbase positions itself as the backbone for the digital economy. The company holds other people's crypto safely and builds the payment layers that moves money around. They're both the vault and the conduit. Custodianship is simply when a consumer purchases Bitcoin or any other crypto, Coinbase provides itself as the platform to store that value and holds it on their behalf. It's in Coinbase's "custody" after you make the purchase.
But I think the real value is in banks and financial institutions and even governments.
Armstrong:
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When BlackRock launched its $52B Bitcoin ETF, it gave retail investors exposure to digital asset trading but BlackRock still needed the infrastructure to hold the Bitcoin. Otherwise the $52B couldn't be attached to the actual 764K units of Bitcoin's supply. BlackRock could not easily hold the Bitcoin itself and launch the ETF without Coinbase because regulators require spot Bitcoin ETFs to use a qualified, licensed custodian for secure storage, and BlackRock lacks its own institutional-grade crypto custody infrastructure that meets those standards.
Coinbase serves as custodian for over 80% of US BTC and ETH ETF assets \[2\]
# Now let's move to the payments layer.
A easy way to think of the payments layer that's offered by Coinbase is how you generally think of plumbing: Coinbase has the pipes to move crypto from point A to point B through its blockchain network, through stablecoins. Stablecoins solve real-world functional problems. For example, when you wire money internationally, it can take days to be received and settled. With stablecoins, on the Base blockchain (Coinbase's own network), its received and settled within a second and at fraction of the cost.
So to bring this all together: Coinbase Base, is the network from which stablecoins can move through quickly at low costs and all the while generating a small fee for Coinbase. This "small fee" equates to $1.3B revenue in 2025, or 18% of their total $7.2B revenue.The overarching vision is that USDC becomes a commonly used payment rail for businesses, international transfers and hopefully everyday commerce with Coinbase poised to capture the billions of volume transactions.
# Subscription and Services Platform
This is Coinbase's recurring revenue engine and it's made up of three buckets:
1. Stablecoin Revenue (covered just above)
2. Blockchain Rewards
3. Other Subscription and Services (basket of things)
Subscription and services revenue reached $2.8 billion in FY2025, up 23% year-over-year and compounded at 53% CAGR since 2021.
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Stablecoin Revenue - already covered in the above payments layer section. $1.3B in 2025, or 18% of total revenue. This is the interest Coinbase earns on the reserves backing USDC through its 50/50 revenue share with Circle. It's driven by USDC market cap and interest rates, not Bitcoin price.
Blockchain Rewards (Staking) - Blockchains like Ethereum and Solana don't use mining to validate transactions. Instead, they use a system called "proof of stake" where people lock up their tokens as collateral to help keep the network secure. In return, the network pays them rewards like earning interest on a savings account, except your deposit is Ethereum instead of dollars and the "bank" is the blockchain itself. You hand over your Ethereum or Solana, Coinbase pools it with everyone else's and runs the infra. They made $677M in fees in 2025 and Coinbase has one of the largest staking operations in the world.
# Finally, we arrive to Other Subscription and Services
It's a basket of offerings but let's just focus on **Coinbase One**. It is their version of Amazon Prime or Robinhood Gold. For a monthly fee members get zero-trading fees, boosted staking rewards, higher USDC yield and a cool credit card.
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Armstrong:
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So now let's tie this all together. In 2021, Coinbase was almost entirely dependent on people buying and selling crypto. Now the compounded revenue of these product offerings under the subscription and services stands at 39% of revenue. Coinbase now has 12 products generating over $100 million in annualized revenue, half generating over $250 million, and two generating over $1 billion.
In other words, the effort to decouple itself from pure digital asset trading is proving successful
# If digital asset trading fizzles away, does Coinbase survive?
There are a myriad of reasons to be a crypto bear. Crypto lacks real utility as money. Faces massive volatility that kills practical use and could get outcompeted by better blockchain alternatives or traditional finance. So what happens if crypto is gone tomorrow? Does Coinbase with its 0.59 correlation go with it?
Probably won't be gone instantly, but there will be pain. And Brian has a chance of getting ahead of it
The honest bear case is this: $4.1B of Coinbase's $7.2B in revenue or 57% still comes from people buying and selling crypto. And the "decoupled" $2.8B subscription and services business isn't as decoupled as it looks. Staking rewards require people to actually want to hold Ethereum and Solana. The $247M lending book is collateralized by Bitcoin - an asset that can drop 70% in a cycle. And the $1.3B stablecoin revenue is tied to USDC market cap and interest rates, both of which compress in a risk-off crypto environment.
If digital asset trading fizzles, the whole revenue stack takes a hit, not just the transaction line.
Armstrong's best move is doubling down on the two things that don't need retail crypto speculation to survive: custody infrastructure and Base. Coinbase already holds 80% of US BTC and ETH ETF assets - that's a regulated, institutional moat that doesn't disappear even if retail trading dies.
Coinbase's own blockchain, is the long game. If USDC becomes a legitimate payment rail for cross-border transfers and business payments and not just digital asset trading - then Coinbase starts looking less like a brokerage and more like Visa. The stock trading push matters too, but only if Brian uses it to retain users during crypto winters rather than acquire new ones. The turnaround story is there. But it requires crypto to stay relevant long enough for the infrastructure bets to compound - and that's the part nobody can guarantee.
Sources
\[1\]EBC - Does Coinbase always move in the same direction as Bitcoin?
\[2\]Coinbase - FY2025 shareholder letter
\[3\]Robinhood - 22M accounts funded
\[4\]Q4'25 Earnings Transcript