Original Title: In Q2 Earnings, MSTR Surges, and Coinbase Stumbles. But What's Next?

Host: Steven Ehrlich, Chief Writer at Unchained

Guest: Owen Lau, Executive Director and Senior Analyst at Oppenheimer & Co's Equity Research Department

Podcast Date: August 2, 2025

Compiled & Edited by: Fairy, ChainCatcher

Editor's Note:

Coinbase is at a crossroads in a new era for the crypto industry: strong growth in stablecoin revenue, ambitious plans for the Base chain, rapid expansion of the derivatives market, and deep collaboration with traditional financial giants like JPMorgan and PNC.

On July 31, Coinbase released its Q2 earnings report, with a net profit of $1.43 billion, far exceeding the same period last year, but trading revenue fell 39% quarter-over-quarter. In this discussion, seasoned analyst Owen provides an in-depth analysis of the core drivers behind the earnings report, strategic layout, and market potential, offering frontline insights.

From the advancement of regulatory policies, controversies over FinTech data fees, to the wave of industry IPOs and accelerated mergers and acquisitions, the next six months in the crypto market will be tumultuous, with every step influencing the industry's direction. This is not only a critical moment for Coinbase but also a bellwether for the entire crypto industry.

The following is the content of the conversation, compiled and organized by ChainCatcher.

Steven: Coinbase released its earnings report, and the market had high expectations, but the reaction was quite poor. Can you explain what they announced and why the market reacted so negatively?

Owen: **Actually, we had long warned to be cautious about this earnings report. The data we track shows that Coinbase's trading volume fell about 40% quarter-over-quarter in Q2. The first quarter performed well, but we already knew that Q2 would weaken. The problem is that market expectations were still too optimistic, leading to an inflated expectation value.

This earnings report basically met our own expectations but was far below market consensus, causing the stock price to drop about 16%.

However, there were no "danger signals" in the report itself. The main issue was the deteriorating macro environment in Q2, with rising risk aversion among investors, which naturally led to a decline in crypto trading.**

Steven: Market demand is actually quite weak, only masked by the actions of some "large financial firms" raising billions to buy assets, which has little to do with retail enthusiasm. I also track retail interest in assets like Bitcoin using Google Trends, which has been consistently low, and this is reflected in Coinbase's earnings report.

Owen: The impact of these factors on trading volume is actually hard to quantify precisely. However, there have indeed been many new corporate financial firms emerging in the first half of this year. This could be a positive, but currently, there is no clear indication of a boost in trading volume.

Of course, if these companies use Coinbase for custody or trading, it will increase the platform's trading volume in the long run. Not just Coinbase, but the entire industry could benefit. But it’s still too early; we need to continue observing the follow-up actions of these companies.

Steven: Coinbase's executives, like Brian, Alicia, and Emily, have been vigorously promoting subscription and service businesses, hoping to hedge against trading volatility, with the goal of having this revenue account for over 50% of total net revenue to stabilize income. However, the subscription business has also not performed well. What do you think?**

Owen: The company had already forecast a slight decline in subscription revenue for Q2, so this isn't unexpected. The actual data is basically in line with expectations, sometimes even slightly higher.

Market disappointment mainly stems from Circle and its IPO leading to overly high expectations regarding market capitalization and mutual revenue. But based on the guidance provided by management and the actual results, the overall performance is in line with expectations.

Looking at the Q3 guidance, subscription revenue is expected to grow about 7% compared to Q2, indicating a moderate growth trend. This shows that the company's goals and growth drivers remain clear, such as market capitalization improvement and increased adoption, especially with the widespread use of stablecoins. So I believe this narrative still holds.

Steven: When Circle released its S-1 document, the community was shocked to find that the money Coinbase makes from USDC could be ten times that of Circle. The recently signed "Genius Act" has an unclear impact on USDC, but given that this is a major part of the business, what are your thoughts?**

Owen: The key is that they expect stablecoin revenue to continue growing. Coinbase is actively promoting the adoption of USDC, such as through partnerships with Shopify and Nodo Clear, expanding its use cases in e-commerce and capital markets.

They hope that USDC can replace cash as collateral and even become a payment method for credit or debit cards in the future. I also believe this is possible, but it requires time and infrastructure support.

Additionally, Coinbase and Circle have a roughly 50/50 revenue-sharing agreement, which is crucial for Coinbase's long-term profitability. So from this perspective, Coinbase's outlook remains strong.

Steven: Coinbase and Circle now have the opportunity to promote USDC applications in e-commerce and traditional finance, getting ahead of major banks like JPMorgan and Citigroup in this "open battlefield." What do you think about the future competitive landscape and development of stablecoins?**

Owen: I think stablecoins can be divided into "exclusive brands" and "generic types," similar to the difference between exclusive credit cards and general credit cards.

Exclusive credit cards, like Macy's own card, can only be used at Macy's, but Macy's also accepts generic cards like Visa or Mastercard. Similarly, it’s a good thing that major banks like JPMorgan are developing their own stablecoins; they are building the infrastructure.

In the future, these exclusive stablecoins will coexist with generic stablecoins like USDC and USDT, running on different payment tracks together.

Steven: Coinbase has launched a new Base app; started tokenizing stocks; launched a local clearing system to supplement international business; and has a regulated derivatives futures business. Can you talk about the logic behind these new products as a whole? And how long until we can see them generate substantial revenue?

Owen: Coinbase places great importance on this new Base App, which was officially launched about two weeks ago. Their goal is to create a "U.S. version of a super app" similar to WeChat. I personally look forward to it because there isn't a product like this in the U.S. Currently, there are about 700,000 to 800,000 people on the waiting list, indicating that users are not just attracted by the airdrop, especially since the Base Token does not have a clear launch date yet.

This app can not only drive trading and custody revenue but also promote the use of USDC in payment scenarios. If successful, it will be a significant breakthrough for Coinbase.

As for the derivatives business you mentioned, it also performed very strongly in Q2. The nominal trading volume in international markets has exceeded $1 trillion, and although its revenue share is still low, the trading volume is growing rapidly.

They are competing with top exchanges globally, and these new businesses indeed have the potential to become key pillars of profitability for Coinbase in the coming quarters or even years.

Steven: If Coinbase completes its $2.9 billion acquisition of Deribit, how significant will the impact be on this derivatives business?

Owen: The impact will be very significant. They have already launched perpetual contracts in international markets and plan to launch them in the U.S. soon. However, Coinbase has almost no presence in the options business, and one of the key reasons for acquiring Deribit is to fill this gap.

Additionally, this will help bring Deribit's technology to the U.S., with large-scale expansion expected as early as next year. The specific impact is still hard to quantify because financial details have not been disclosed; we will have to wait until Q3 to see the complete data, at which point I will provide an update.

Steven: Have they mentioned the activity level of the Base chain? I know on-chain activity is increasing; does it currently contribute to revenue?**

Owen: We have been tracking this, and Base's activity level in Q2 was slightly higher than in Q1. However, in terms of revenue, the contribution is still very small, possibly less than 1% of total revenue, and it is still in the early stages. But looking ahead to the next 3 to 5 years, it has the potential to become very critical.

Steven: How important is the collaboration between JPMorgan, PNC Bank, and Coinbase?**

Owen: The collaboration between Coinbase and JP Morgan could become a template for future partnerships with other banks.

Currently, Coinbase acts more like a backend technology provider for these banks, without interfering with user experience, data, or branding. JP Morgan still controls everything, and Coinbase only provides the underlying crypto technology.

This is one of the reasons we are optimistic about Coinbase; it is not just a trading platform but can also become the infrastructure for traditional finance.

Through JP Morgan, Coinbase can now reach about 80 million users. For example, users holding JP Morgan credit cards can now directly buy crypto with their cards.

Secondly, they are integrating on-chain payments with traditional points systems. Users can now convert credit card points into USDC, and in the future, it may even support airline miles, cinema points, etc., which is a key breakthrough for driving cryptocurrency into mainstream consumption.

Users can now directly link their Chase bank accounts to Coinbase for a seamless buying experience, showing that the collaboration between the two has become very close and will continue to deepen in the future.

Steve: Please briefly discuss your outlook for the next six months, especially regarding the progress of market structure legislation (like the Clarity Act), and considering that Q4 is usually a strong period for the crypto market, what are your thoughts?

Owen: Overall, I have several expectations:

1. Increased regulatory clarity

I hope the Clarity Act can be implemented in September, which will clarify the classification of Bitcoin and Ethereum, and we may see legal definitions for altcoins like Cardano, Solana, and Doge.

2. More companies going public or raising funds

With clearer regulations, we may see more crypto companies initiating IPOs or new rounds of financing.

3. Accelerated industry mergers and acquisitions

Traditional financial institutions may enter the crypto industry through mergers and acquisitions, and smaller companies may also merge to scale up.

As for Coinbase, I have a few additional points:

• The stock price drop is an expected adjustment and should not be overinterpreted.
• Trading volume is recovering, and Q3 SNS revenue is expected to grow.
• The Deribit acquisition has not yet been reflected in the earnings report, and it may become a new growth point in the future.
• Coinbase's finances are solid, and it has the capacity for continued expansion (whether through internal growth or acquisitions).

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