Coinbase Global, Inc. Q4 FY2025 Earnings Call

Good afternoon, and welcome to the Coinbase Fourth Quarter and Full Year 2025 Earnings Call. My name is Anil Gupta, and I'm Vice President of Investor Relations at Coinbase. Joining me on today's call are Brian Armstrong, Co-Founder and CEO; Emilie Choi, President and COO; Alesia Haas, CFO; and Paul Grewal, Chief Legal Officer. During today's call, we may make forward-looking statements, which may vary materially from actual results. Information concerning risks, uncertainties and other factors that could cause these results to differ is included in our SEC filings. Our discussion today will also include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the Shareholder Letter on our Investor Relations website. Non-GAAP financial measures should be considered in addition to, not as a substitute for GAAP measures. We'll start today's call with comments from Brian and Alesia and then take questions. And with that, I'll turn it over to Brian.

Crypto prices have fluctuated, but Bitcoin has been the best-performing asset class over the past decade. At Coinbase, we have experienced similar cycles before, and adoption continues to increase; we're optimistic about regulatory clarity on the horizon. Additionally, we have diversified our business, and revenue from stablecoins, subscriptions, services, and trading of other asset classes like stocks and commodities means our revenue is less affected by crypto price changes. We launched the Everything Exchange in the fourth quarter and are already seeing positive results. Our global trading volume and market share have doubled year-over-year, reaching new historical highs. Recently, even as crypto prices declined, gold and silver futures generated record trading volume on our exchange. We achieved our highest 24-hour trading volume in over a year, and Base reached a new transaction record with AI agents adopting stablecoin wallets. Base is quickly becoming the go-to platform for AI. Looking forward, our strong financial position and advancements with the Everything Exchange allow us to keep investing in the current market environment. We will continue to purchase Bitcoin, buy back our stock, and invest in growth. Now, I'd like to discuss our strategy for success in 2026. The financial services sector is enormous, with trillions of dollars in revenue opportunities. Crypto is modernizing financial systems, covering trading, payments, and lending, and Coinbase is ideally positioned to lead this transformation. There are four key reasons for this. First, we securely store more crypto than any other company, making us the most trusted brand in the industry. We work with thousands of institutions, including five global systemically important banks and 150 government agencies. We hold 12% of all crypto globally, more than our next four competitors combined. Our platform's assets have nearly tripled in the last three years, and they tend to remain with us as we enhance our offerings. Second, we've doubled our trading volume and market share annually. We began as the market leader in the U.S. and are now expanding our international presence as regulatory clarity improves worldwide. Third, we have diversified our revenue to include more than just trading. Now, we have 12 products generating over $100 million in annual revenue. Subscription and services revenue reached record highs, up 5.5 times from 2021's peak, and we’ve maintained positive adjusted EBITDA across various market conditions, consistently achieving profitability over the last two years. Finally, we possess significant expertise in crypto at Coinbase, which allows us to create unique products. We were pioneers in offering DEX trading, leading the way in DeFi borrowing and lending, and we have developed our multi-party computation cold storage system to speed up customer transactions. This expertise is a fundamental strength for us. For these reasons, we are well-positioned to lead in this shifting landscape as financial services increasingly embrace crypto. As we look to 2026, we have three primary goals. First, we aim to expand the Everything Exchange. Last year, we unveiled our vision for an all-encompassing platform for all tradable assets—crypto, equities, prediction markets, and commodities. The premise is straightforward: customers should have access to every investment option in one trustworthy place. Stocks and prediction markets are natural extensions of our core offerings, enhancing customer engagement and revenue, and we’re already seeing positive initial feedback. We achieved all-time highs in derivatives volume and revenue in the fourth quarter, and recently we made prediction markets available to all customers. We will soon introduce more markets and a dedicated sports hub. We are also rolling out nearly 10,000 equity tickers this month and have acquired Echo to facilitate efficient on-chain capital formation, paving the way for unique investment opportunities. We’re working towards offering tokenized equities, which can significantly enhance the financial system. With the supportive leadership of the SEC towards crypto, we see a clear pathway forward. We will also broaden the Everything Exchange to additional countries. Therefore, our primary goal for 2026 is to grow the Everything Exchange. Our second goal is to enhance stablecoins for payments. Stablecoins represent a significant opportunity in crypto that many are still undervaluing, particularly regarding a digital dollar's potential. In the fourth quarter, we achieved record levels of USDC held in Coinbase products, pushing USDC's market cap to around $75 billion. In 2026, we aim to increase stablecoin use through better product integration, expanding our payments infrastructure across the Coinbase developer platform and for businesses. We’re also safeguarding our ability to reward customers with stablecoins so that they can benefit, ensuring U.S. regulated stablecoins remain competitive with unregulated options. If we were to design money from scratch today, it would resemble crypto and stablecoins, allowing for near-instant fund transfers globally at negligible costs. Given the clear efficiency advantages, we anticipate continued growth for stablecoins. We’re also observing that AI entities are starting to leverage stablecoins for transactions, and I believe this will establish stablecoins as the default payment option for these AI entities. Thus, our second priority focuses on stablecoins and payments. Our third and final priority for the 2026 timeframe is promoting on-chain adoption. This is integral to our business strategy and mission, referring to DeFi, self-custodial wallets, and the extensive use of decentralized technology over centralized alternatives. We are noticing greater adoption of self-custodial wallets globally, enabling individuals to manage their assets independently. With just a smartphone and Internet connection, anyone can access improved financial services and engage in the global economy. Our strategy for on-chain adoption is promising. In 2026, expect more DeFi features within the Coinbase app, an increase in use of the base app for trading, and an uptick in transaction volume on the base chain—all contributing to a rise in on-chain activity supported by Coinbase infrastructure. In summary, as crypto continues to transform the financial landscape, Coinbase is ideally positioned to benefit from this shift and contribute to greater economic freedom worldwide. Now, I will hand it over to Alesia.

Thanks, Brian. Good afternoon, everyone. 2025 was a strong year for Coinbase, both operationally, as Brian just highlighted, and financially. We executed consistently against our goals. We delivered or outperformed our revenue and expense guidance that we provided every quarter. Our 2025 total revenue was $7.2 billion, a 9% year-over-year increase. Subscription and services revenue reached $2.8 billion, up 23% year-over-year and more than 5.5x higher than the prior cycle peak in 2021. As Brian noted, we are pleased to see the growth of the number of products generating $100 million of annualized revenue. And equally, if not more pleased to see many of these products scale. We are working hard to see more products join the $250 million, $500 million, and $1 billion annualized revenue club. Turning to our Q4 results. I'm going to start with some highlights. We did have quarter-over-quarter softer market conditions. Crypto market cap was down 11% quarter-over-quarter. However, we outperformed the market on total trading volume, driven by strong derivatives volume growth. Deribit saw another all-time high quarter. Q4 marked our ninth consecutive quarter of native unit inflows. This is inflows to our assets on platform, where customers then stake, they custody, they engage in USDC. So we're seeing growth in native units despite the price headwinds. It was our 12th consecutive quarter of adjusted EBITDA profitability. We are a business that is prepared for volatility. We have diversified over the last four years. Our transaction revenue is diversified and will continue as we execute against the Everything Exchange. As we mentioned, we have 12 products with over $100 million of annualized revenue, and we are scaling them. Half of those are over $250 million. As we enter the first quarter and see even more volatility, what we are pleased to see is that our retail customers are holding like they always have, but those who are in the market are buying the dip. Every week, we've seen net buying versus selling on our platform as we've entered this year. As Brian mentioned, Coinbase is buying the dip. We've deployed $1.7 billion to repurchase shares. We fully offset our 2025 dilution from stock-based compensation, and we're buying Bitcoin. So let's dive into the details. Q4 total revenue was $1.8 billion, down 5% quarter-over-quarter. Q4 transaction revenue was $983 million, down 6% quarter-over-quarter, while subscription and services revenue was $727 million, down 3% quarter-over-quarter. Turning to expenses. Total operating expenses were $1.5 billion, up 9% quarter-over-quarter and in line with our outlook. Technology and development, general and administrative and sales and marketing expenses collectively increased 14% quarter-over-quarter, primarily driven by costs associated with the recently closed acquisitions of Deribit and Echo and higher USDC rewards, reflecting the record USDC balances held in Coinbase products. When you exclude deal-related costs associated with our M&A activity in 2025, tech and dev, G&A plus sales and marketing would have increased 11% on a quarter-over-quarter basis. We ended the year with 4,951 full-time employees, up 3% quarter-over-quarter as we continue to invest in product team development, customer support and compliance infrastructure. Adjusted EBITDA in the fourth quarter was $566 million and adjusted net income was $178 million. On a GAAP basis, we reported a net loss of $667 million, primarily driven by a $718 million unrealized loss on our crypto investment portfolio and a $395 million loss on strategic investments, which includes our investment in Circle. As I mentioned, we're adding to our crypto investment portfolio on a weekly basis. We've modestly increased the size of our weekly purchase to build positions in these price markets. Importantly, we remain in a very strong capital and liquidity position. We ended the year with $11.3 billion in cash and cash equivalents and total available resources of approximately $14.1 billion when you include our crypto assets held for investments and collateral. As our stock price declined during Q4 and through early February, we took the opportunity to begin repurchasing our stock within our previously approved authorization. As of today, we have repurchased $1.7 billion of our common stock, fully offsetting dilution from stock-based compensation for the year 2025. We secured an $815 million notional discount to the average price we issued that stock-based compensation in 2025. In January, our Board approved an additional $2 billion share repurchase authorization, which we plan to continue to deploy opportunistically when we see price dislocations and to manage down our future dilution from stock-based compensation. Now I'm going to touch briefly on our Q1 outlook. Through February 10, we have generated approximately $420 million of transaction revenue. Markets have experienced heightened volatility as we began the year. While we always caution extrapolation, it's even more important when we see volatility spikes. For the first quarter, we expect subscription and services revenue to be in the range of $550 million to $630 million, reflecting the lower average crypto price environment we are in, lower interest rates, and lower staking protocol rewards rates compared to the fourth quarter. On the expense side, we expect technology and development plus general and administrative expenses to be flat quarter-over-quarter in the same range we guided last quarter in the range of $925 million to $975 million. Similarly, we expect sales and marketing expenses to be flat to down quarter-over-quarter in the range of $215 million to $315 million, with our performance in the range largely depending on performance marketing opportunities and the USDC balances on our platform. Overall, while crypto markets remain cyclical, we believe Coinbase enters 2026 from a position of strength. We have a more diversified revenue base. We have a scaled global platform, and with the balance sheet that we can be flexible to continue investing through the cycle. With that, let's go to questions.

All right. We'll take our first questions submitted to us on X. Our first one comes from Mike Pob65, who asks if we are making any progress on positive outcomes regarding the CLARITY Act.

Yes, I can take that one. So the answer is yes. I'm actually quite optimistic that we'll get something through here in the next few months. I just want to say a big shout out of appreciation to everyone in the Senate and the administration. I think they're doing all the hard work here really to help bring this to a good place. There's lots of constituents around the table. I'd say the crypto industry is united in their asks and the things that are important to them. Other constituents are around the table, of course, as well. I think there's an opportunity to make a win-win outcome here for everyone, including banks, crypto companies, U.S. citizens, and everyone. What we've really focused on is what matters most to our customers, preserving the benefits of crypto, making sure that there's not any kind of protectionism happening for incumbents, but we just want to have a good level playing field. I think that everyone understands that, and they're all leaning in to try to create a good outcome here. The GENIUS Act was just passed six months ago. So we're careful to make sure that nothing is being relitigated there. I think there's a good path to get something through. Others are doing the majority of the work here, and we try to add in commentary where helpful, but hopefully, we'll get to a good outcome in the next few months.

Our second question is from @InternetToken who asks, with Base TVL and sequencer revenue growing strongly in late 2025, what percentage of overall subscription and services revenue do you expect Layer 2 activity from Base and partners to contribute in 2026? And are there plans to further incentivize builders there?

I'll start with this one, Brian, and then hand it over to you. First, I just want to correct the question a little bit. Base revenue, we monetize both directly and indirectly. Directly, we're monetizing Base through sequencer fees. Those sequencer fees are recorded in other transaction revenue, not in our subscription and services revenue. However, Base benefits us indirectly as well. Indirectly, we are using Base to monetize throughout our stack, both for Coinbase builders and our own products. For example, USDC on Base does drive USDC revenue through subscription and services. We don't have a forecast that we're offering today, but our goal throughout all of our products and services is to continue to drive quality, drive users to our platform to monetize through the stack of products and services we offer. But Brian, do you want to touch on incentives?

Yes. For the second part of the question about what incentives we're putting out there for builders on Base. We're doing this in a number of different ways. We do give out grants called Base grants for builders. We're improving our developer tools all the time just to make it simple for folks to onboard. We're getting distribution from any of these builders through our apps. A recent example is like these AI agents that have been spinning up; we put out some really useful tools for developers to just get any AI agent a crypto wallet and begin to make stablecoin payments and essentially complete agentic commerce. That has started to get quite a good amount of traction. We're exploring a Base token as well, which we've mentioned in the past. Then the Base app itself, which is taking this more trading-focused approach, we think it can help drive distribution for builders on Base. Our goal is to grow adoption. Base works well across payments, trading, DeFi, and a multitude of use cases. Our objective is to help it be the primary utility layer for crypto, all built on Ethereum.

Our third and final question comes from X, who asks what product or platform initiative you are most excited about that investors may be underestimating today.

Yes. The two I'd draw folks' attention to are the Everything Exchange, right? I think it's a big vision: how do we get all tradable assets on-chain? The end state of this is that we want to see 24/7 global markets where anybody can come in and participate. It creates a more level playing field and democratizes access to much of this. It will just make it much easier to do capital formation and price discovery. The ideal outcome here is we'd be one of the top exchanges in the whole world across any asset class, and that's really the vision for the Everything Exchange. Given our deep crypto expertise, I think we'll have an advantage there. The second one I would point people to are stablecoin payments. I mean, I think we are still in the very early days of this. Stablecoins are already quite large, but I think we are just scratching the surface; payments globally will flow to the path of least resistance. Stablecoin rails are just faster, cheaper, and more global. Today, about half of 1% of global GDP runs on crypto rails; I don't see any reason why that couldn't be 10% or 20% in the next decade. We think there's a lot of room to run there as well.

All right. We'll now take questions from our research analysts. Questions were submitted to us in writing, and we'll take one question per analyst and optimize to cover as broad a range of topics as possible without being repetitive. Our first question comes from Andrew Jeffrey at William Blair, who asks, please discuss line of sight to Everything Exchange monetization. What are your thoughts on the timing about revenue diversification?

Thank you for this. Diversification has long been a focus of ours. When I look at 2026, I would focus on the diversification of tradable assets under the Everything Exchange. Derivatives will be a big growth driver, we believe, in 2026. We have good momentum both across the U.S. and our international markets. We have momentum coming from the integration of options into our platform from the Deribit acquisition that we did in late 2025. We believe that this can be a large part of our future story and strategy. Additionally, within the last few weeks, as Brian shared, we have rolled out prediction markets and equities. There are early encouraging signals, but we don't want to get ahead of ourselves. We'll share more updates at the end of Q1 when we have more than weeks and days of data under our belt. We're really proud that historically we've had achievements in driving diversification. We have 12 products, as we mentioned, with over $100 million of annualized revenue—derivatives included. We're working hard to scale, and we see that more and more of these products will be able to graduate and hope that they will join the $250 million tier of annualized revenue, where we already have six of those 12 products. Ultimately, the goal of all of these products is to drive assets on our platform, grow those native units, and drive that flywheel where customers hold their assets. We hope they will trade more products. The more tradable products we give to them, that will drive the monetization on trading. Underpinning that with our subscription and services, we store those assets; we provide platforms like USDC to enable trading in and out of various markets and other horizontals that will really support that trading growth.

Next question is from Ken Worthington at JPMorgan, who asks, could your economic relationship with Circle change depending upon language in a market structure bill? In particular, could passage of a bill such as CLARITY that eliminates promotional payments to stablecoin holders directly eliminate or directly curtail Coinbase's participation in Circle reserve fee income?

Yes. The short answer to your question is no. We don't see any way that this market structure legislation would change our economic relationship with Circle. The part that's being debated in the Senate draft for clarity is actually the House draft that already received a strong bipartisan vote and didn't have any restrictions on these stablecoin rewards. But some drafts we saw were contemplating that and thus prohibiting rewards essentially in various ways. Ironically, if that were to go into law, it would make us more profitable because we would just continue to receive the economics from Circle. However, we pass the majority of that along to the customer. If we were prohibited from doing that, ironically, it would just increase our profits. We actually don't want that to happen for a number of reasons. One is that we think it's better for customers and better for the United States of America so that these regulated stablecoins can be competitive on a global stage. It's already allowed under the GENIUS Act, which just became law five months ago. Our strong point of view is that this should continue to be allowed, and we'll keep fighting for that.

Our next question is from Owen Lau at Clear Street, who asks, the valuation of the whole sector, including tokens and equities, has come down. How does Coinbase think about the opportunities in larger-scale buybacks and M&A?

Thanks for the question, Owen. We're very focused on it. As I mentioned in my opening comments, we ended the year in a strong financial position with over $11 billion in cash and cash equivalents. We are focused on buybacks. As I mentioned, we've deployed $1.7 billion to repurchase 8.2 million shares under our buyback program. That includes Q4 through February 10. 2025 was an incredible year for us on the M&A front. We completed 10 acquisitions/acqui-hires, and each one helped us enable acceleration in our product roadmap, including Deribit, which is the largest crypto deal of all time. We're deploying our money into Bitcoin purchases; we significantly grew our portfolio in 2025 by doubling the number of BTC units we held in our investment portfolio. We're going to continue down all those paths. We will continue buying Bitcoin, continue buying back stock, continue to look at opportunistic M&A, and continue to dynamically manage the opportunities that we see ahead of us. We feel very proud that we've delivered 12 consecutive quarters of positive adjusted EBITDA, and we've proven that we can drive profits in any market environment. We will continue to do so in 2026 and allocate that capital with the highest ROI to our business.

Our next question is from Patrick Moley at Piper Sandler, who asks, what have you seen in terms of prediction market adoption to date among Coinbase customers? Do you have plans to build your own prediction market venue? Or are you comfortable continuing to act as retail distribution for existing venues?

Yes, I can take that one. Our prediction markets really just rolled out to 100% of customers about a couple of weeks ago, so it's early days, but the interest has been great. Super Bowl weekend was a really great moment where a lot of customers got to experience it for the first time. We're making lots of rapid improvements, both on the UX, adding more markets, and a dedicated sports hub where people can see live scores and things like that. We're just getting the word out. A lot of Coinbase customers are delighted to find out that this is available in the app because they already store quite a lot of assets with us. We just need to make them aware of it, and I think it's going to be a really good outcome. We launched it with our partnership with Kalshi, and they've been a great partner. It's not an exclusive arrangement. We also have the ability to launch our own markets. Nothing to announce on that at the moment, but we're keeping all options open.

Our next question is from James Yaro at Goldman Sachs. Do you think we're heading into another crypto winter? How long until the cycle could begin to recover? And how should investors think about the KPIs suggesting that the cycle could begin to turn?

Yes, I can touch on that. In general, we don't try to predict the future too much here. We see our job as just building great products and services for our customers, and we leave the investment decisions to them. I will say that ironically, I kind of enjoy these periods sometimes when the market is down just because it allows us to keep building. There are opportunities in every market, whether up or down. So it gives us a chance to buy Bitcoin and buy back our stock. We've been through so many cycles like this in crypto. I actually don't think it's that connected to core KPIs or some sort of fundamentals. There's a lot of kind of Monday morning quarterbacking happening where people will look back and say, 'Oh, it must be because of Kevin Warsh being an inflation hawk or quantum computing being on the horizon or something.' I actually think markets are a little bit more psychological; people think someone else is going to think something, so they try to get ahead of it. I don't think this market correction is that connected to any fundamentals. We're still seeing good growth of stablecoin adoption and other indicators. In this environment, we're seeing traders on our platform at these prices buying. But I would leave the investment decisions to you all on this call.

Next question is from Ben Budish at Barclays. Can you talk about your 2026 spending plans? Given a variety of potential top-line outcomes in 2026, how do you think about the need to spend versus want to spend? Where is there most flex in the cost base? Is it marketing, venture moonshot-type investments, etc.?

Thanks, Ben. I love the way you frame this as need to spend versus want to spend because I would definitely say there are lots of employees who want to spend. That's our job to figure out the right investments for the company and ensure that we're deploying our capital prudently. 2025 was an investment year. We included a chart in our shareholder letter that showed the majority of our year-over-year increase went into, first and foremost, sales and marketing. USDC rewards were the single largest contributor to year-over-year expense growth in connection to the year-over-year all-time high we saw in USDC held in Coinbase products. Another 16% of the year-over-year increase was driven by M&A, the majority of which was deal-related expenses and not core to our operations. Looking at our Q1 expense outlook, the range in the outlook is flat to our Q4 expense outlook. While we had growth in 2025, as we enter 2026, we are focused on flat for the first quarter. We will take into consideration the conditions we operate in and be very dynamic as we've just rolled out several new products and services. We will look at the opportunities that we have ahead of ourselves versus our expenses. We're keeping our eye on the ball, but right now, for Q1, flat to Q4.

Our next question is from Robbie Bamberger at Baird. Yesterday, a Wall Street Journal article said that BlockFill was suspending customer withdrawals. Today, Coinbase has reportedly had issues with customers trying to buy, sell, and transfer. Was the Coinbase issue just a tech mishap and not a more severe issue? Does the amount of leverage in the crypto ecosystem increase the risk that we may be more prone to customer freezes during quick pullbacks?

I'll take this one. If anyone wants to add, please jump in. We did have an event yesterday where some users briefly experienced interruptions in their ability to buy, sell, and transfer crypto on our retail and prime platform. Derivatives and equities trading remain unaffected. This was a result of a technical issue, unrelated to trading volume or market conditions. The issue is now resolved. We've made significant investments in our platform to hopefully mitigate these types of events and outages that historically have been driven by volume changes and feel very proud of our investments, but we will still have technical bumps at points in time.

Next one is from Alex Markgraff at KeyBanc Capital Markets. As you work to scale the Everything Exchange, can you describe the strategy for bringing customer assets to Coinbase? To what extent do you believe equities and prediction markets to act as a front door to net new users?

Sure. Our overall strategy we call the asset accumulation flywheel. It starts with being the most trusted brand in crypto. That causes people to store more assets with us. We store more crypto than any other company in the world, as I mentioned in my opening comments. When people are storing their assets with us because of this trust, we have an opportunity to connect more and more products into those assets. Whether that's the Coinbase card, loans, or earning rewards on staking or USDC, we can also now give access to more trading products through the Everything Exchange. We see that the more products people connect into those assets, the stickier they become. We use the monetization from that to complete the flywheel and invest back into being the most trusted brand while adding more products. Adding asset classes like equities and prediction markets into the Everything Exchange makes the product more valuable for existing users; we're also seeing it help attract more traditional investors who want to come in and onboard and just have an easiest place to trade every asset class, maybe get better rewards on their credit card or better rates lending out their money. Ultimately, crypto is here to update financial services more broadly and provide better financial services.

Our next question is from Ramsey El-Assal at Cantor Fitzgerald. You guys have made some key acquisitions in 2025. Can you help us think through your M&A strategy at this point? What parts of the business are you looking to bolster with M&A? And what types of assets are you looking at?

I can take this. Yes, I think 2025 was a fantastic year for M&A at Coinbase and included some great marquee pickups, Deribit and Echo and others. We made 10 acquisitions and acqui-hires, and each has accelerated our product roadmap. In 2026, we're obviously being very selective but going to be aggressive where assets meaningfully pull forward the roadmap. Thematically, we're looking for incremental M&A opportunities in advancing the Everything Exchange, owning more on-chain infrastructure, as well as bundling stablecoins and payments infrastructure.

Our next question is from Crypto Pete Christiansen at Citi. There's a recent debate that the original version of L2s as branded shards for scaling is no longer entirely valid as Ethereum L1 is improving its own capacity and L2 decentralization has been slower than expected. The debate further argues that L2s should focus on value-added features including AI, privacy, etc. What's Coinbase's view on the Base L2 value prop going forward in this respect? How might potential DeFi regulations shape Base's future?

Yes, sure. Vitalik had a great post recently. I think in some ways, he's right that Ethereum doesn't need dozens or hundreds of different L2s. Base has rapidly become the #1 L2 on Ethereum. It provides broad utility making it attractive to developers; it's great for payments, trading, and DeFi. People wanting to build various applications can find support. Base has demonstrated amazing scale, with great speed of execution and the ability to move a bit faster than the Ethereum L1, which is by design. The L1 should be more cautious, as they are likely more decentralized. We can inherit much of the security constraints from the L1 as the L2 can move a bit faster. The scale and speed on Base have been excellent. We’re also working on adding novel features like privacy. I think private transactions or optional private transactions will be a big differentiator. The Base app is also primed for distribution. We’re exploring a Base token, among other developments. There's a lot we can do there. I anticipate the line between L1s and L2s could blur over time, so we'll continue building Base at a rapid pace to attract more development activity and adoption.

Our next question is from Devin Ryan at Citizens. Stablecoin adoption is a 2026 priority, but we've seen market cap flatline for the last couple of months. Why has that been? What gives you confidence around growth in 2026? Can you provide any insights on incremental adoption trends?

I'll start here, Brian, if you want to add on. We've seen two things happening. One is that we've noticed a relatively range-bound risk appetite. When you think about stablecoins, the first product-market fit was as a trading pair to allow global traders to move across the exchange ecosystem. They utilized it against the longer tail of assets. We've seen a shift where there's not as much risk appetite for those longer tail, which has thus dampened speculation activity and the stablecoin market cap expansion. Secondly, there's a higher velocity of stablecoin payments, settlements, and remittances. We've experienced more transaction volume but not necessarily a higher market cap as a result. We're monetizing stablecoins in incremental and new ways. We hold confidence and optimism for 2026 because we're embedding stablecoins more deeply in our products and services. We have been a key driver of USDC's market cap growth and our assets on the platform due to our ability to embed and create a unique experience with USDC and our offerings.

The only thing I'd add is that what gives me confidence in continued growth is the passage of the GENIUS Act in the U.S. Following that legislation, we saw about 150 companies announce stablecoin integrations in the subsequent three months, and it’s faster, cheaper, and more global. No company wants to overspend moving their money; that will be a significant tailwind for continued adoption of stablecoins. Moreover, it’s crucial that these stablecoins maintain their ability to offer rewards programs. U.S. regulated stablecoins do not exist in a vacuum; they represent a minority of all dollar-issued stablecoins globally. With this legislation, we need to ensure that U.S. regulated ones maintain competitiveness. Other countries, like China, have introduced interest on stablecoins, and it's critical for the U.S. regulated offerings to stay competitive.

Our next question is from John Todaro at Needham. Can you provide an update on how much USDC market cap is currently on the Coinbase platform, e.g., a January average or February number?

We don't provide January or February data on the USDC balances. I would point to our Shareholder Letter for our end-of-year balance in our products, as well as any details on the revenue that we earned on USDC in that period.

Our next question is from Bo Pei at U.S. Tiger. Can you quantify the effective take rate compression from simple to advanced and Coinbase One users? Structurally, where do you see normalized consumer take rates settling over the next two to three years?

Thank you, Bo, for my quarterly take rate question. In the quarter, we saw a mix shift with more volume going to our advanced product and more trading volume coming from Coinbase One users. As we grow our Coinbase One members, we expect an increasing amount of trading volume to shift under the Coinbase One membership umbrella. They benefit from up to no trading fees, although we still generate a spread on those transactions, which shows up recorded as retail transaction revenue. I don't have a view on when the take rates will need to compress from simple to advanced. We are focused on growing Coinbase One membership, and with that growth, we anticipate more trading to occur under that membership umbrella.

Our next question is from Gus Gala at Monash Crespi Hart. Adoption in commerce and developer rails, which you talked about in your Shareholder Letter. How do you work with Circle and USDC on real-world volume commercialization? Can you provide an update on the timeline to get up the S-curve in B2B payments? How is this different from the potential revenue S-curve? Contrast that with USDC on Base for more consumer-centric volumes via x402.

We work on our own products as it relates to driving payments on USDC. We partner with Circle on overall items, but we also find ourselves competing with them. Our goal is to drive a payments vertical where businesses can transact in USDC on Base for their payment solutions. You'll hear more about this as we progress through the year. This area is early in our product journey, but we are very pleased with the advancements we've made in Q4 to build out the product set and APIs. We are now focusing on go-to-market and growing customer adoption.

Our final question comes from Dan Dolev at Mizuho. How should we think about the strength of the casual crypto trader in this winter? Any patterns you can call out for when they might come back eventually?

I'll take that one too. I've been in this seat for almost eight years now. We've seen multiple crypto market price cycles at this point. What remains true for the last eight years is that the majority of retail consumers on our platform hold through price declines. They tend to be more active in periods of high volatility. What we're pleased to see in Q1 is that for those who are active, they are in a net buy versus sell position. Consumers are tending to buy the dip right now. However, we're also witnessing more pullback as markets move to more of a risk-off environment. We've seen this before, and it speaks to our goals of diversification, both in growing our subscription and services business, as well as diversifying the assets so they can trade anything available, not just limited to crypto assets. We're pleased with our progress so far, and as we move through the year, we hope to show that we can continue diversifying our revenue streams.

All right. That does it for today. Thank you for joining us, and we look forward to speaking to you again on our next call.