Coinbase Stumbles: Revenue Miss, User Exodus, and CEO Stock Sale Rattles Market

Coinbase experienced a mixed third quarter, with its revenue totaling $1.20 billion, slightly below analyst expectations of $1.233 billion. Despite this, the company saw growth in its subscription and services revenue, which reached $570 million, highlighting a growing recurring income stream even as the company remains heavily reliant on trading activity. Monthly Transacting Users (MTUs) did fall to 7.4 million from 9.3 million a year prior, a decrease Coinbase attributed to broader market conditions. However, Coinbase's share of crypto trading volume increased for the fourth consecutive quarter, reaching 10.7%, indicating it is gaining market share amid a quieter overall market. Adjusted EBITDA stood at $332.9 million, marking 15 consecutive profitable quarters by this measure. The company's prediction markets business surpassed $200 million in annualized revenue, and its Coinbase One subscription service achieved a record number of subscribers. Additionally, Coinbase disclosed a significant purchase in Q3, acquiring 643 Bitcoin worth $1.5 billion for its balance sheet.

Separately, Coinbase CEO Brian Armstrong has established a plan under SEC Rule 10b5-1 to sell up to 8.17 million Class A shares. This plan, adopted in August, allows executives to schedule stock sales in advance to manage personal risk, with sales potentially occurring between November 2026 and October 2027, subject to stock price conditions. Co-founder Fred Ehrsam and President Emilie Choi have similar plans, bringing the total potential sales to approximately 13.6 million shares. Armstrong has historically engaged in such sales, having sold an estimated $545.7 million in shares over nine months starting in April 2025, consistently framing these transactions as part of his risk management strategy rather than a signal about the company's future.

Coinbase shares (COIN) experienced a notable decline of nearly 15% on the day, a slump that was primarily attributed not to its earnings report, but to a major security breach disclosed by Binance. On October 29, Binance revealed a security breach estimated to be $6.3 billion, making it the largest crypto theft on record. Approximately $3 billion in assets have been frozen with the assistance of industry partners. While Binance has not officially attributed the attack to any group, hackers allegedly linked to North Korea are suspected. Binance stated that it found no evidence of a leaked wallet private key and confirmed that deposits were unaffected. The exchange also assured that it has $6.34 billion in reserves available to cover potential losses and expected to resume withdrawals within 48 hours. The market reacted swiftly to the news: Bitcoin fell approximately 4.5% to below $77,000, shares of Strategy (MSTR) dropped nearly 10%, and Strive (ASST) shares declined over 12% at times. Coinbase's stock, even before this event, was already down over 55% for the year.