Coinbase (COIN.US)'s Q3 net profit of 719 million dollars plummeted: core business shrinks and executive holdings reduction raise concerns

According to Woofun AI, Coinbase (COIN.US) experienced a sharp drop in stock prices on October 30, 2026, falling 10.62% in a single day and closing at $143.54. This sharp fluctuation contrasted with its newly announced net profit of US$719 million for the third quarter, highlighting the deep concerns of the market about the structural risks behind the financial report.

This divergence between profit performance and stock price performance is rooted in a serious imbalance in the composition of profits. Although Coinbase's net profit for the third quarter reached $719 million, a significant increase from $433 million in the same period in 2025, data compiled by Woofun AI showed that approximately $715 million of this was directly derived from cryptocurrency investment income rather than main business creation. Excluding this and other investment income, the company's adjusted net profit was only $78 million. Adjusted EBITDA reached US$333 million, up 60% month-on-month, above market expectations of approximately US$290 million, and remained positive for the 15th consecutive quarter.

More serious is the contraction in core revenue: total revenue of US$1,216 billion, down 35% year on year (US$1.87 billion in the same period in 2025). Among them, transaction-related revenue fell 44% year over year to US$590 million, and individual investors' spot trading volume fell 59% year on year; operating profit for the quarter was only US$61.7 million, far lower than US$481 million in the same period last year. Although subscription and service revenue reached 570 million US dollars with a 3% month-on-month increase, accounting for about 47% of total revenue, the increase in overall revenue pressure caused investors to question the profit model that simply relied on balance sheet asset appreciation, believing that this did not truly reflect the activity of the platform's clients' trading activities.

In a complex environment where market share and external risk coexist, Coinbase's fundamentals face multiple tests. On the one hand, the company's global cryptocurrency trading volume market share rose to 10.7%, for the fourth consecutive quarter, with both spot and derivatives recording growth; USDC's average holdings in Coinbase products hit a record of US$22 billion, up 49% year on year; the predicted annual revenue of the market also exceeded 200 million US dollars, and daily trading users increased by more than 60% month-on-month, showing a certain degree of business resilience. On the other hand, regulatory and security incidents posed significant disadvantages. According to the EU Crypto Asset Market Regulation (MiCA), Coinbase has stopped providing European Economic Area customers with the trading and exchange of 14 non-compliant stablecoins, including USDT, PYUSD, and DAI. Users must withdraw their balance by October 30, and the overdue period will be automatically converted to USDC at market price.

At the same time, a security breach at Amplitude, a third-party analytics service provider, led to the disclosure of user contact information. Although Coinbase emphasized that its systems and customer funds were unaffected, such associated risks exacerbated market unease, causing investors to take additional uncertain discounts into account when evaluating their market position.

Executives' large-scale holdings reduction plans have further amplified the market's pessimistic expectations. CEO Brian Armstrong, co-founder Fred Elsom, and President Emily Choi have all developed share sales plans based on the 10b5-1 rule, involving approximately 13.6 million shares of the company's shares. Based on the closing price on October 29, the total value of this batch of shares is approximately $2.2 billion.

Although such plans are usually set in advance, against the backdrop of falling stock prices, such a volume of insider sell-offs inevitably raises concerns about shareholders' confidence in management. Since the closing price of the first trading day in 2026, the company's stock price has fallen by a cumulative total of 39.31%, and the market focus has turned to the fourth quarter financial report, particularly whether transaction revenue can stabilize and predict whether the market size can continue to expand on an annualized level of $200 million. According to the company guidelines, transaction revenue for the fourth quarter ended October 25 million was approximately US$165 million, subscription and service revenue is expected to be US$550 million to US$630 million, and the adjusted fee guidance for the full year 2026 was further lowered by US$100 million to US$4.15 billion to US$4.3 billion. If the core business fails to prove its independent hematopoietic ability, the profit story supported by investment returns alone may be unsustainable, which will profoundly affect investors' valuation logic of the entire crypto exchange industry.