Key Takeaways
- Coinbase reported a 27.5% quarter-over-quarter revenue decline in Q2, 2025.
- Lower trading volume hurt the exchange’s income from fees.
- In the long run, Coinbase aims to reduce its reliance on trading fees by bolstering its services business.
Presenting its second-quarter earnings on Thursday, July 31, Coinbase reported a notable decline in net revenue from the previous quarter, falling significantly short of Wall Street’s expectations.
The weak numbers reflect low trading volume and worse-than-expected traction in Coinbase’s services business, which executives have promoted as the key to its continued growth.
Coinbase Underperforms in the Second Quarter
In the three months to June 30, Coinbase reported net revenues of $1.42 billion. This marks a year-over-year increase of 2.9%, but a decline of 27.5% from the previous quarter.
Analysts had expected some decline in earnings, given low volatility and a general uptrend in crypto markets throughout the quarter, conditions that drive users to trade less.
However, Coinbase’s revenue drop was far worse than predicted.
Low Trading Volume Suppresses Revenue
Coinbase’s drop in revenue was mostly caused by a fall in trading volume, which declined 42.5% from $393 billion in Q1 to $237 billion in Q2.
The number of monthly transacting users also declined, falling from 9.7 million to 8.7 million.
The resultant 39.5% decline in Coinbase’s revenue from transaction fees may have been unavoidable given market conditions.
With retail investors preferring to hold on to their assets amid a bull market, and the high-volume traders making Coinbase’s bread and butter less active due to low volatility, the exchange’s reliance on trading fees for income weighed it down in the second quarter.
However, even revenues from subscriptions and services dropped 6%, which may point to deeper challenges for its long-term business strategy.
Subscriptions and Services
In 2022, CEO Brian Armstrong said he wanted to grow subscriptions and services revenue to over half of Coinbase’s total revenue.
This, he argued, would provide Coinbase a more predictable revenue stream that is less affected by the ups and downs of the crypto market and more insulated from declining volatility.
However, the company has yet to reach this milestone, even with the previous quarter’s significant decline in transaction revenues.
Over half of the $656 million Coinbase earned from subscriptions and services came from stablecoins. The company generates income from USDC balances held on its platform via a revenue-sharing deal with Circle.
Bucking the general trend, the firm’s stablecoin revenues climbed 11.7% quarter-on-quarter.
Speaking to investors on Thursday, Armstrong referred to stablecoins as one of Coinbase’s “core businesses” and expanded on plans to establish the company as a cornerstone of the booming stablecoin payments market.
“We see payments as the next big use case in crypto and believe that the majority of all payments in the economy will eventually run on stablecoin rails because they are faster, cheaper, and global,” he said.
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
