Spoiler Alert – Coinbase Q3 Revenue Estimates

We estimate Coinbase revenue for Q3 2023 to be $616 million, a 7% decrease from Q2. Our estimate is below the consensus expectation of $650 million. Despite the overall decline in the crypto market, Coinbase outperformed other centralized exchanges, experiencing a 17% drop in spot volume compared to a global 32% decrease. Consequently, its volume share grew to 10.6% from 8.9% in the previous quarter. Non-trading revenue is becoming a significant component of Coinbase’s revenue; we expect it to form 54% of net revenue in Q3. A major contributor to this is interest income from deposits against USDC. Coinbase’s rollup Base, launched in August 2023, witnessed rapid adoption with its first viral app, friend.tech, leading to 30 million funded addresses in just a quarter. The estimated revenue from Base’s sequencer is $7 million for Q3. Despite a drop in ETH prices and staking yield, the amount of ETH staked through Coinbase grew by 10% this quarter, highlighting the platform’s resilience and growth in its staking product.