On October 30, the largest cryptocurrency exchange in the United States reported that its third-quarter revenue was $1.2 billion, down 17% from the previous quarter.

In its letter to shareholders, the company reported net income of $75 million and its seventh consecutive quarter of positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), which came in at $449 million.

The company noted that it saw average growth in its units in staking, USDC, and custody “despite softer market conditions.”

Cryptocurrency markets were trading sideways between July and September as months of consolidation continued, which is not good for companies that make most of their profits from fees.

Transaction Fees Are Falling

Coinbase typically makes the lion’s share of its profits from transaction fees, which are among the highest in the industry. Its transaction revenue was $573 million, down 27% from the previous quarter. However, it still accounted for nearly half of its total revenue.

The company reported total transaction revenue of about $190 million in October, adding that it expects subscription and services revenue to be between $505 million and $580 million in the fourth quarter.

The firm’s subscription and services revenue, which includes offerings like stablecoins, staking, and leverage for professional traders, fell 7% to $556 million. The company has shown diversification in transaction-based revenue, which accounted for more than 80% of its total a couple of years ago.

Stablecoin revenue reached $247 million, up 3% from the previous quarter. Coinbase said its USD Coin (USDC) has become the fastest-growing major USD coin year-to-date.

USDC supply has increased by 43% year-to-date, while Tether (USDT) supply has increased by 32% over the same period. However, Coinbase forgot to mention that USDC supply fell by 57% between mid-2022 and late 2023, while USDT fell by only 22%.

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