Coinbase’s Q3 earnings report completely turned the “loss” narrative on its head. Analysts had expected a loss of $0.15 per share, but the company delivered net income of $718.7 million, or earnings of $2.51 per share, reversing its $359.5 million loss in the second quarter and topping the $432.6 million profit from the same period last year. But don’t rush to declare a turnaround: about $715 million of that profit came from unrealized gains on the crypto assets Coinbase holds on its own balance sheet. Excluding that, adjusted net income was just $77.7 million. Revenue from its actual business was shrinking: total revenue fell 35% year over year to $1.216 billion; transaction revenue plunged 44% to $590.2 million, as retail spot trading volume fell 59%; and subscription and services revenue declined 20% to $570.2 million. The bright spots were elsewhere: prediction markets reached an annualized revenue run rate of over $200 million, platform assets stood at $377 billion, average USDC balances held in Coinbase products hit a record $22 billion, and its share of global trading volume climbed to 10.7%. For Q4, the company guided to subscription and services revenue of $550 million to $630 million. Shares closed at $160.59 that day, down 1.07%, and rose just 0.41% after hours to $161.25—the market sees it clearly: these earnings came from crypto prices, not trading volume. The fate of the exchange is now half in the hands of the market.#Coinbase #Earnings