Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

63bfda36a502b0575f019413fd17f7ee682ba53a279d096e000d75c258ae395d

United States

International

Rest of the World

Total Revenue

20b7bde0d1a219cd4f9203a91a1096a1e01be546da8a68f697982e22f18bf8d9

Total Revenue (USD, thousands)

Cost of Goods Sold (COGS) (USD, thousands)

SG&A (USD, thousands)

R&D (USD, thousands)

D&A (USD, thousands)

Interest Expense (USD, thousands)

Operating Income (EBIT) (USD, thousands)

Net Income (USD, thousands)

EPS - Basic (USD)

EPS - Diluted (USD)

09aecffa3c1082d12c12449b94afe183e3e9d6e9a8d3acd664702c94c64ef706

Current Assets (USD, thousands)

Cash and Cash Equivalents (USD, thousands)

Accounts Receivable (USD, thousands)

Inventory (USD, thousands)

Non-Current Assets (USD, thousands)

Property, Plant, and Equipment (PP&E) (USD, thousands)

Goodwill (USD, thousands)

Intangible Assets (USD, thousands)

Current Liabilities (USD, thousands)

Accounts Payable (USD, thousands)

Short-term Debt (USD, thousands)

Accrued Expenses (USD, thousands)

Non-Current Liabilities (USD, thousands)

Long-term Debt (USD, thousands)

Lease Liabilities (USD, thousands)

Deferred Tax Liabilities (USD, thousands)

Shareholders' Equity (USD, thousands)

Retained Earnings (USD, thousands)

Common Stock (USD, thousands)

Additional Paid-in Capital (USD, thousands)

63032af5d235f946b99af271bc66fac03fcfb27100fe679d242004f6e6e1fd55

075fc50cda278d3c65ce4f8d040c0bc06cc303a0e11bd834284f3e6022e98a43

| Name             | Position                          | Start Date       | Short Bio                                                                                                                                                                                                                     |
|------------------|-----------------------------------|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Brian Armstrong  | Chairman & CEO                   | May 2012         | Co-founder of Coinbase, CEO since inception, and Chairman since February 2021. Previously a software engineer at Airbnb and founder of Universitytutor.com. Holds degrees from Rice University.  **[0001679788-24-000080_coin-20240425.htm:4]** **[0001679788-24-000080_coin-20240425.htm:30]** **[0001679788-23-000065_coin-20230428.htm:6]**                    |
| Emilie Choi      | President & COO                  | June 2019        | President since November 2020 and COO since June 2019. Joined Coinbase in March 2018 as VP of Business, Data, and International. Previously held leadership roles at LinkedIn, Warner Bros., and Microsoft.  **[0001679788-24-000080_coin-20240425.htm:30]** **[0001679788-23-000065_coin-20230428.htm:28]** **[0001140361-22-015201_edge20001234x1_def14a.htm:30]**         |
| Alesia Haas      | Chief Financial Officer          | April 2018       | CFO of Coinbase since April 2018. Previously CFO at Sculptor Capital Management and OneWest Bank. Holds a B.S. in Business Administration from California Polytechnic State University.  **[0001679788-24-000080_coin-20240425.htm:30]** **[0001679788-23-000065_coin-20230428.htm:28]**                               |
| Paul Grewal      | Chief Legal Officer & Secretary  | August 2020      | Chief Legal Officer & Secretary since August 2020. Previously VP & Deputy General Counsel at Meta and a U.S. Magistrate Judge. Holds degrees from MIT and the University of Chicago Law School.  **[0001679788-24-000080_coin-20240425.htm:31]** **[0001679788-23-000065_coin-20230428.htm:29]**                       |
| Lawrence Brock   | Chief People Officer             | February 2019    | Chief People Officer since February 2019. Previously Senior Managing Director and Chief People Officer at Citadel LLC and VP at Red Hat. Holds degrees from SUNY Albany and Georgia State University.  **[0001679788-24-000080_coin-20240425.htm:31]** **[0001679788-24-000080_coin-20240425.htm:30]**                 |
| Christa Davies   | Director                         | July 24, 2024    | Appointed as a director on July 24, 2024. CFO and EVP of Global Finance at Aon plc. Serves on Coinbase's Audit and Compliance Committee. Aon is a vendor of Coinbase.  **[0001679788-24-000133_coin-20240724.htm:1]**                                                     |
| Paul Clement     | Director                         | July 24, 2024    | Appointed as a director on July 24, 2024. Serves on the Board's Audit and Compliance Committee.  **[0001679788-24-000133_coin-20240724.htm:1]**                                                                                                                           |
| Chris Lehane     | Director                         | July 24, 2024    | Appointed as a director on July 24, 2024. Joined the Board following a recommendation by the Nominating and Corporate Governance Committee. Participates in the Non-Employee Director Compensation Program.  **[0001679788-24-000133_coin-20240724.htm:1]** **[0001679788-24-000135_xslF345X02/wk-form3_1722025009.xml:0]**            |
| Kathryn Haun     | Outgoing Director                | May 2017         | Director since May 2017. Founder and CEO of Haun Ventures. Previously a general partner at Andreessen Horowitz. Stepping down after the 2024 Annual Meeting of Stockholders.  **[0001679788-23-000065_coin-20230428.htm:4]** **[0001679788-24-000072_coin-20240418.htm:1]**                                          |
```

9c2b367ba611f067bd24baf4994a0314fdd50444c65b9e4b42d549b67b0f8843

Transaction Revenue

- Consumer, net

- Institutional, net

- Other transaction revenue

Subscription and Services

- Stablecoin revenue

- Blockchain rewards

- Interest income

- Custodial fee revenue

- Other subscription

Other Revenue

- Corporate interest

- Crypto asset sales

7e4e409d8798e8cccf8dc09a51979cb1db46be2295ebea276515b051739a2296

Coinbase Global, Inc. (COIN) operates as a leading cryptocurrency platform with a mission to increase economic freedom globally. The company provides a trusted platform for customers to engage with crypto assets through trading, staking, safekeeping, spending, and fast, free global transfers. Coinbase offers critical infrastructure for onchain activities, which include interactions with blockchain-powered technologies such as self-custody wallets, decentralized applications, and open community engagement platforms.  **[0001679788-24-000022_coin-20231231.htm:9]** 

1. **Transaction Revenue** - Generates fees from trading activities by both consumers and institutions, including individual customers and institutional customers such as hedge funds and financial institutions.  **[0001679788-24-000019_shareholderletterq42023.htm:3]** **[0001679788-24-000022_coin-20231231.htm:135]** **[0001679788-24-000149_coin-20240630.htm:16]** 
   - **Consumer, net**: Transaction fees from individual customers.
   - **Institutional, net**: Transaction fees from institutional customers.
   - **Other transaction revenue**: Includes Base and payment-related revenue.  **[0001679788-24-000019_shareholderletterq42023.htm:3]** **[0001679788-24-000022_coin-20231231.htm:135]** **[0001679788-24-000149_coin-20240630.htm:16]** 

2. **Subscription and Services Revenue** - Provides revenue from ecosystem products and other services, including stablecoin revenue, blockchain rewards, interest and finance fee income, custodial fee revenue, and other subscription and services revenue.  **[0001679788-24-000019_shareholderletterq42023.htm:3]** **[0001679788-24-000022_coin-20231231.htm:135]** **[0001679788-24-000149_coin-20240630.htm:16]** 

3. **Other Revenue** - Includes corporate interest and other income.  **[0001679788-24-000019_shareholderletterq42023.htm:3]** **[0001679788-24-000022_coin-20231231.htm:135]** **[0001679788-24-000149_coin-20240630.htm:16]**

03c34b929d0bb7ed9a854f4eac9993d3ee4138f1e0da2196fe480007d0905286

Monthly Transacting Users (MTUs) [millions]

Total Trading Volume [$B]

Safeguarding Customer Crypto Assets [$B]

Blockchain Rewards Revenue [$M]

dd99e8112bff614a2d3f0b778b262d7868cbfd46563477ffc61bd6fcf1c692cf

1. With transaction revenue declining 27% quarter-over-quarter compared to an 18% drop in trading volume, what factors are causing this larger decline in revenue, and how do you plan to address the pressures on transaction revenue moving forward?
2. The significant increase in stablecoin pair trading, which generates little to no fees, is impacting your retail fee rates and overall revenue; is this shift towards stablecoin trading structural, and what strategies are you implementing to mitigate its effect on your business model?
3. Coinbase's trading volume in altcoins has decreased notably compared to earlier quarters; what are the main reasons for this decline, and how do you plan to regain market share in trading of lesser-traded tokens to diversify your revenue streams?
4. Considering the potential for a more favorable regulatory environment post-election, beyond reducing litigation risk, what specific initiatives are you prepared to launch that are currently constrained, and how will regulatory clarity influence your product offerings and growth strategies, especially in areas like staking and listing new tokens?
5. Given the authorization of a $1 billion stock repurchase program amidst significant investment needs in technology, infrastructure, and regulatory compliance, can you elaborate on how this capital allocation aligns with your growth strategy and why you are choosing buybacks over reinvesting more heavily in the business or preserving cash due to crypto market volatility?

0d0c49810c07fa5a61efc62a2dc77b890342b97ff7fb2e6e0f5f9e790e2d5f28

| Program Details           | Program 1              |
|---------------------------|------------------------|
| **Approval Date**         | October 2024  **[0001679788-24-000187_coin-20240930.htm:40]** **[0001679788-24-000187_coin-20240930.htm:59]** **[0001679788-24-000187_coin-20240930.htm:173]**  |
| **End Date/Duration**     | No expiration  **[0001679788-24-000187_coin-20240930.htm:40]** **[0001679788-24-000187_coin-20240930.htm:59]** **[0001679788-24-000187_coin-20240930.htm:173]**  |
| **Total Additional Amount** | **$1.0 billion**  **[0001679788-24-000187_coin-20240930.htm:40]** **[0001679788-24-000187_coin-20240930.htm:59]** **[0001679788-24-000187_coin-20240930.htm:173]**  |
| **Remaining Authorization** | N/A                  |
| **Details**               | Designed to return capital to shareholders and strategically allocate capital. Funded by existing cash, cash equivalents, USDC, and future cash flows. Provides flexibility to repurchase opportunistically based on market conditions.  **[0001679788-24-000187_coin-20240930.htm:173]** **[0001679788-24-000187_coin-20240930.htm:40]** **[0001679788-24-000187_coin-20240930.htm:59]** **[COIN_3404779_11]**  |

42dba7551e3fa1ba848a8a18b49979fc3c28f99f34fcad43b60fd02f292f8957

- The company's retail transaction revenue is being impacted by a significant increase in **stablecoin pair trading**, which generates **little-to-no fees**, leading to a **decline in blended average fee** quarter-over-quarter. The **stablecoin impact was the most material contributor** to the change in rate this quarter.  **[COIN_3404779_20]** **[COIN_3404779_13]**
- Despite launching derivatives platforms internationally and in the U.S., the company faces challenges in scaling this business due to **regulatory hurdles** and a **highly competitive market**. They admit there is **"still a lot of work to do"**, and key steps like obtaining the **MiFID license in Europe** are pending.  **[COIN_3404779_21]**
- The company is not providing any **outlook on 2025 expenses**, creating uncertainty about future expense growth relative to revenue growth. Although they mention being disciplined, there is no clear guidance on how they plan to manage expenses while investing in growth opportunities.  **[COIN_3404779_16]**

b630cfdb42e3564898d8d906342f5d7b8ca60e69998bdf094b157683f603c803

- **Coinbase has expanded its retail offerings** beyond trading to include staking, USDC Rewards, Wallet and Smart Wallet, and a breadth of DeFi applications, leading to increased retail engagement and diverse customer behaviors on the platform.  **[COIN_3395810_12]**
- **USDC's strong growth and regulatory compliance**: USDC market cap is up **30% year-to-date**, average on-platform balances increased **50% quarter-over-quarter**, and recent weeks saw **$20 billion of transaction volume on USDC on Base**. With USDC being the first MiCA-compliant stablecoin in Europe, Coinbase is positioned for significant growth in this market.  **[COIN_3395810_10]**
- **Regulatory clarity is expected to unlock significant institutional investment and innovation** in crypto. Coinbase, with a large number of institutional clients on Coinbase Prime, is well-positioned to benefit from increased institutional adoption once regulatory uncertainties are resolved.  **[COIN_3395810_14]**

1a36490334aee730c28a629e188cf231dc82ad28950a73977db89982178f9915

- Coinbase expects expenses to increase in Q2 due to higher variable expenses, including customer support and infrastructure costs, which may impact profit margins.  **[COIN_3382271_10]**
- Regulatory uncertainties, such as the SEC's attempts to classify Ether as a security, could negatively impact Coinbase's trading and staking business if Ether is deemed a security.  **[COIN_3382271_17]**
- Coinbase's strong Q1 adjusted EBITDA margin of 60% may not be sustainable, as it is dependent on favorable crypto market conditions, which can be volatile and unpredictable.  **[COIN_3382271_10]**

c71dca0981fc522e36b5de1598b031a6af75951c14bdf697f41bd2c9c10c6d6e

1. **Regulatory Environment**  
   **Q:** Views on Uniswap Wells notice and Ether as a security?  
   **A:** Coinbase's Paul Grewal addressed concerns about the Uniswap Wells notice, noting Uniswap's public and transparent response asserting the claims lack merit.  **[COIN_3382271_17]**  He highlighted a trend of companies openly disagreeing with the SEC while maintaining respectful dialogue.  **[COIN_3382271_17]**  Regarding Ether's classification, Grewal emphasized that the SEC has previously stated Ether is **not a security**, and Coinbase supports Uniswap and ConsenSys in seeking clarity.  **[COIN_3382271_17]** 

2. **Investment Plans**  
   **Q:** How are you balancing investments with profitability?  
   **A:** CFO Alesia Haas stated that Coinbase aims for positive adjusted EBITDA in all market conditions.  **[COIN_3382271_10]**  In strong crypto markets, they delivered **60%** adjusted EBITDA margins in Q1.  **[COIN_3382271_10]**  They plan prudent and modest investments, learning from 2021 when they grew too quickly.  **[COIN_3382271_10]**  The Q2 expense increase is mainly due to variable spend lagging trading volume spikes and infrastructure scaling.  **[COIN_3382271_10]** 

3. **Capital Allocation**  
   **Q:** What's your approach to capital needs and M&A?  
   **A:** Coinbase is investing capital into its prime financing business, ending the quarter with over **$700 million** in loans.  **[COIN_3382271_9]**  They have a capital-efficient business with positive unit economics and use their balance sheet to bootstrap products and pursue opportunistic M&A.  **[COIN_3382271_9]**  They've closed **ORDAM** in 2023 (now Coinbase Asset Management) and are acquiring a **MiFID license** to unlock derivatives in **20+ EU markets**.  **[COIN_3382271_9]** 

4. **USDC Growth**  
   **Q:** What drives USDC's rebound and thoughts on legislation?  
   **A:** Coinbase saw USDC's market cap grow by over **$8 billion** since the start of the year.  **[COIN_3382271_18]**  Emilie Choi attributed this to USDC being a highly trusted stablecoin, leading to broader adoption.  **[COIN_3382271_18]**  Paul Grewal noted that Congress is proposing stablecoin legislation, which Coinbase welcomes, expecting standards for transparency and reserves that will keep the U.S. market attractive.  **[COIN_3382271_18]** 

5. **Bitcoin ETFs Impact**  
   **Q:** Did Bitcoin ETFs drive more trading volume?  
   **A:** CEO Brian Armstrong acknowledged that excitement around Bitcoin ETFs boosted new customer adoption across their products.  **[COIN_3382271_16]**  Coinbase saw all-time highs in trading volume and active clients in their institutional business due to this increased interest.  **[COIN_3382271_16]** 

6. **Institutional Fee Rates**  
   **Q:** What's driving higher institutional fee rates?  
   **A:** CFO Alesia Haas explained that the fee rate increase is due to a mix shift toward Coinbase Prime, which has higher fees than the exchange.  **[COIN_3382271_14]**  Growth in Coinbase Prime led to higher engagement, trading volume, and active clients, driving the fee improvement over the last two quarters.  **[COIN_3382271_14]** 

7. **User Growth**  
   **Q:** How much did new users contribute to growth?  
   **A:** Alesia Haas stated that growth came from re-engaging existing users acquired before 2023, attracting new users, and higher trading volume per user.  **[COIN_3382271_15]**  However, detailed attribution was not provided.  **[COIN_3382271_15]** 

8. **Crypto Cycle Outlook**  
   **Q:** Where are we in the crypto cycle?  
   **A:** Brian Armstrong observed that crypto market cap is up about **60%** in Q1, with volatility still below 2021 levels.  **[COIN_3382271_19]**  He mentioned events like Bitcoin ETFs and the Bitcoin halving, noting historically Bitcoin peaks **12 to 18 months** post-halving.  **[COIN_3382271_19]**  He highlighted Layer 2 solutions as a significant upcoming development.  **[COIN_3382271_19]** 

9. **Institutional Adoption**  
   **Q:** What's driving institutional clients' multi-product engagement?  
   **A:** Alesia Haas noted that Coinbase has built out a full Prime suite offering custody, trading, financing, and staking.  **[COIN_3382271_12]**  Customers are engaging across this spectrum, with custody and trading going hand-in-hand.  **[COIN_3382271_12]**  Adoption varies by client needs, but strong uptake across these products has contributed to growth.  **[COIN_3382271_12]** 

10. **Lightning Network**  
    **Q:** What's your strategy with Lightning Network and payments?  
    **A:** Brian Armstrong discussed integrating the Lightning Network to reduce transaction times by over **99%**, making them instant compared to Bitcoin's 10-minute block time.  **[COIN_3382271_13]**  Fees were lowered to less than **0.1%** of previous fees.  **[COIN_3382271_13]**  Partnering with Lightspark, Coinbase aims to make Layer 2 solutions default to achieve sub-one-second, one-cent transactions, fulfilling crypto's goal of updating the global financial system.  **[COIN_3382271_13]** 

11. **Payment Revenues**  
    **Q:** Details on payment-related revenues and sequencer fees?  
    **A:** Alesia Haas described payment revenues as including instant withdrawal fees, debit card fees, commerce fees, and venture-type payment products.  **[COIN_3382271_11]**  She noted that **Base** has been the biggest contributor to quarter-over-quarter growth and is the largest revenue stream in this category.  **[COIN_3382271_11]** 

12. **Smart Wallets**  
    **Q:** Expectations for smart wallets on Base platform?  
    **A:** Brian Armstrong highlighted the rollout of smart wallets utilizing passkeys and biometrics to simplify onboarding.  **[COIN_3382271_8]**  Currently in developer preview on testnet, they've seen incredible developer interest.  **[COIN_3382271_8]**  This innovation aims to make crypto accessible to **1 billion** people by easing technical challenges.  **[COIN_3382271_8]** 

13. **State-Issued Stablecoins**  
    **Q:** Thoughts on state-issued stablecoins and their impact?  
    **A:** Paul Grewal acknowledged the importance of state governments and state-chartered institutions in supporting stablecoins and crypto generally.  **[COIN_3382271_20]**  He expressed that the dual banking system serves consumer and investor interests well, and hopes any legislation will continue to recognize that role.  **[COIN_3382271_20]** 

68aada91be73dc6bd3f3fd2717f1565a60365533a59bd3375e6d73794f9b1354

- Coinbase plans to increase headcount in the second half of 2024, which could lead to higher operating expenses and impact profitability. "We do plan to increase hiring through the back half of 2024."  **[COIN_3395810_18]**
- A significant portion of Coinbase's gross profit comes from interest income associated with USDC reserves, which may decline if interest rates decrease. "We are prepared... for rate declines."  **[COIN_3395810_11]**
- Growth in new products like derivatives and on-chain initiatives may not contribute materially to financial results in the near term due to early stages of development and regulatory uncertainties. "At this point in time, derivatives... is not a material driver of our financial results."  **[COIN_3395810_9]**  "But it's too early at this moment. I don't see any path to do it in the near term."  **[COIN_3395810_13]**

fc8f80cd8612b50f2426cbbf80d9b5500149a3d2c7af87c91ed5f440c53c6bfb

- Coinbase has obtained a MiFID license in Europe, which will unlock derivatives trading in over **20 EU markets**, expanding its international presence and growth potential.  **[COIN_3404779_21]**
- Coinbase has onboarded over **100,000 retail advanced traders** to its U.S. futures trading platform, demonstrating significant growth in its derivatives offering and potential for increased trading volumes and revenues.  **[COIN_3404779_21]**
- Coinbase is actively pursuing M&A opportunities to enhance its product offerings and international expansion, leveraging its **strong balance sheet** and liquidity position, which could accelerate growth once regulatory clarity is achieved in the U.S.  **[COIN_3404779_18]**

b88f8f014cb4b01a3e9d5461864ac4ce742ee8e2e6647c0eddffed3cf3d9dc4b

- Coinbase is experiencing strong growth in user engagement, with increased trading volumes driven by both existing and new users, as well as higher trading volumes per user. This indicates a healthy and growing user base contributing to revenue growth.  **[COIN_3382271_15]**
- The excitement around Bitcoin ETFs has significantly boosted institutional client engagement, with **40%** of institutional clients engaging with three or more products in Q1. Coinbase saw direct benefits such as **69%** quarter-over-quarter growth in assets under custody to **$171 billion** and a **64%** increase in custodial fee revenue, demonstrating the company's ability to capitalize on market developments.  **[COIN_3382271_6]** **[COIN_3382271_16]**
- Coinbase is maintaining strong operating leverage and profitability focus, generating positive adjusted EBITDA even as it invests prudently for growth. In Q1 2024, total revenue increased by **72%**, while total expenses increased by only **5%**, showcasing the company's scalable business model and operational discipline.  **[COIN_3382271_10]**

815103493ddd235c008927a8a969beb3f308ee758313406902120852dab8f864

1. **Derivatives Platform Growth**  
   **Q:** How is Coinbase's derivatives platform progressing?  
   **A:** Coinbase's derivatives platform is making significant strides, although it's still early days.  **[COIN_3395810_9]**  Derivatives represent **75% of all crypto trading volume**, and Coinbase is now active in the U.S. and internationally.  **[COIN_3395810_9]**  In Q2, they expanded to include more contracts and were the first to offer margin to crypto futures for several assets.  **[COIN_3395810_9]**  They also added real-world assets like gold and oil commodities futures.  **[COIN_3395810_9]**  Volume on Coinbase International Exchange has been strong, and they are building momentum.  **[COIN_3395810_9]**  With the MiFID license expected to close in 2024, they aim to unlock derivatives in over **20 EU markets**, which is a big opportunity.  **[COIN_3395810_9]**  While derivatives are not yet a material driver of financial results, they are optimistic about its future impact on revenue.  **[COIN_3395810_9]** 

2. **USDC Growth and MiCA Legislation**  
   **Q:** What is the impact of MiCA on USDC, and how is USDC performing?  
   **A:** The MiCA legislation is a significant development in Europe, and USDC is the first MiCA-compliant stablecoin.  **[COIN_3395810_10]**  This compliance gives USDC a credibility boost, potentially encouraging migration from other stablecoins like Tether.  **[COIN_3395810_10]**  USDC has become the **fastest-growing stablecoin**, with market cap up **30% year-to-date**.  **[COIN_3395810_10]**  Average on-platform balances increased **50% quarter-over-quarter**, and recently, there was **$20 billion** of transaction volume on USDC on Base.  **[COIN_3395810_10]**  MiCA has been a critical unlock, and Coinbase sees strong potential to drive USDC adoption across digital asset trading, DeFi, and global dollarization.  **[COIN_3395810_10]** 

3. **Balance Sheet Strategy and Interest Income**  
   **Q:** How is Coinbase managing its growing cash balances and interest income?  
   **A:** Coinbase is pleased with its balance sheet strength and is using cash to support its prime financing business and ETF launches.  **[COIN_3395810_11]**  A significant portion of cash is allocated to support products and to pay off the **2026 convertible notes**.  **[COIN_3395810_11]**  They maintain a strong balance sheet to be opportunistic for investments, both organic and inorganic.  **[COIN_3395810_11]**  Regarding interest income, they have benefited from higher interest rates with USDC over the past year.  **[COIN_3395810_11]**  They are prepared for rate declines and aim to grow USDC usage and native units to offset potential decreases in interest income.  **[COIN_3395810_11]** 

4. **Pricing Environment and Take Rates**  
   **Q:** What's driving changes in consumer transaction take rates?  
   **A:** The blended average fee rate increased due to growth in new revenue streams like derivatives and wallet fees, which contribute to consumer transaction revenue but are not reflected in reported spot trading volume.  **[COIN_3395810_16]**  This creates a disconnect when calculating average fees, as it's not an apples-to-apples comparison.  **[COIN_3395810_16]**  The mix between simple and advanced trading remained consistent with the prior quarter, and there was no material change to fees this quarter.  **[COIN_3395810_16]** 

5. **Impact of Regulatory Clarity**  
   **Q:** How might regulatory clarity affect Coinbase's position and competition?  
   **A:** Regulatory clarity is seen as the biggest blocker for institutions to allocate more funds into crypto.  **[COIN_3395810_14]**  If crypto legislation is passed, it could unlock new pools of capital and lead to a huge surge of innovation.  **[COIN_3395810_14]**  Coinbase believes that clear rules are good for everyone and is optimistic about where the industry could be in five or six years with supportive regulation.  **[COIN_3395810_14]** 

6. **Retail Engagement Trends**  
   **Q:** How is retail engagement evolving at Coinbase?  
   **A:** Retail engagement has expanded beyond trading to include staking, USDC rewards, and products within Wallet and Smart Wallet.  **[COIN_3395810_12]**  Customers are engaging in new ways, and while retail traders behave in line with market volatility, deeper engagement comes from the broader portfolio now offered.  **[COIN_3395810_12]** 

7. **Coinbase Asset Management Roadmap**  
   **Q:** What's the strategy for Coinbase Asset Management?  
   **A:** Coinbase Asset Management offers institutional customers different strategies to access crypto markets.  **[COIN_3395810_13]**  They aspire to provide index funds and retail products in the crypto space, similar to a "Coinbase 500," a market cap-weighted index for retail investors.  **[COIN_3395810_13]**  However, current regulatory constraints make this challenging, and they are continuing policy efforts to make it possible in the future.  **[COIN_3395810_13]** 

8. **On-chain Initiatives and Coinbase's Role**  
   **Q:** How is Coinbase supporting on-chain initiatives and developer engagement?  
   **A:** Coinbase provides core infrastructure like Layer 2 solutions and smart wallets, enabling innovators to build at the application layer.  **[COIN_3395810_15]**  They are hosting events like the Base Camp hackathon to support builders.  **[COIN_3395810_15]**  Coinbase's developer platform, CDP, offers tools for third parties to build on-chain applications, integrating crypto into various sectors of the global economy.  **[COIN_3395810_15]**  They aim to update the global financial system with faster, cheaper, and more permissionless crypto rails.  **[COIN_3395810_15]** 

9. **Headcount Increase and Cost Management**  
   **Q:** Why is Coinbase planning to increase headcount in the back half of the year?  
   **A:** Coinbase plans to increase hiring, focusing on consumer and international platforms and strengthening product foundations to scale with anticipated growth.  **[COIN_3395810_18]**  They are being prudent in managing fixed costs, investing thoughtfully in key growth areas to meet market demand.  **[COIN_3395810_18]** 

10. **Political Landscape and Bipartisan Support**  
    **Q:** Is there increasing bipartisan support for crypto in the political landscape?  
    **A:** Crypto enjoys strong champions on both sides of the political aisle, and there has been a significant rhetorical shift from both parties.  **[COIN_3395810_17]**  The crypto community represents a massive voting block now taken seriously in Washington, D.C..  **[COIN_3395810_17]**  Over **1.3 million** people have signaled their intention to elect pro-crypto candidates.  **[COIN_3395810_17]**  Coinbase feels there is substantial momentum in gaining political support for crypto.  **[COIN_3395810_17]** 

0a331c12b719d54be708b09c04c8234219373ea401e6e9b1a68feeed4879a47c

1. **Regulation and Election Impact**  
   **Q:** How will friendlier regulation affect Coinbase's growth?  
   **A:** Management believes that clarity and fair treatment from regulators would unlock innovation and growth in the U.S., increasing revenue by attracting more traders and allowing them to list more assets, including crypto securities.  **[COIN_3404779_14]**  Clarity would benefit areas like trading, stablecoins, staking, and partnerships with banks and payment providers.  **[COIN_3404779_14]**  They expect positive effects at both federal and state levels, reducing restrictions and fostering growth.  **[COIN_3404779_14]** 

2. **Retail Fee Rate Decline**  
   **Q:** Is fee rate decline due to stablecoin trading mix shift?  
   **A:** Yes, the blended average fee rate decreased due to more stablecoin pair trading, which generates little to no fees, and a reduction in non-trading transaction revenue.  **[COIN_3404779_13]**  There were no material changes to the fee rate structure in the consumer app.  **[COIN_3404779_13]** 

3. **2025 Expense Outlook**  
   **Q:** How will expenses grow relative to revenue in 2025?  
   **A:** Management emphasizes a focus on expense discipline, being prudent, and selectively increasing headcount in growth areas.  **[COIN_3404779_16]**  They plan to flex variable spending to match volumes, taking the same disciplined approach in 2025 as they did in 2024.  **[COIN_3404779_16]** 

4. **Derivatives Expansion**  
   **Q:** What steps are planned to scale derivatives offerings?  
   **A:** Coinbase obtained a MiFID license in Europe, unlocking derivatives in over 20 EU countries.  **[COIN_3404779_21]**  They are adding more order books and asset types, including commodities like oil and gold.  **[COIN_3404779_21]**  Their U.S. regulated entity onboarded over **100,000** retail advanced traders.  **[COIN_3404779_21]**  Management sees 2025 as a pivotal year to hit their stride in derivatives.  **[COIN_3404779_21]** 

5. **M&A Opportunities**  
   **Q:** Will Coinbase build or acquire to fill product gaps?  
   **A:** Management is actively looking at M&A opportunities, being selective and disciplined.  **[COIN_3404779_18]**  They've recently closed acquisitions like a MiFID license for EU derivatives and Station Labs for Smart Wallet development.  **[COIN_3404779_18]**  They are open to building, buying, or investing to drive innovation and growth.  **[COIN_3404779_18]** 

6. **Base Layer 2 Positioning**  
   **Q:** How will Coinbase leverage its position in Layer 2?  
   **A:** Base has been successful as a tool that builders find easy to use.  **[COIN_3404779_19]**  Built on the Optimism stack, Base aims to be a hub for partners.  **[COIN_3404779_19]**  Coinbase focuses on integrating Base deeply into their product suite, creating a flywheel effect for developers.  **[COIN_3404779_19]**  They prefer organic growth over aggressive financial incentives.  **[COIN_3404779_19]** 

7. **Altcoin Trading Volumes**  
   **Q:** Are there shifts in altcoin trading volumes?  
   **A:** Altcoin trading volume decreased due to lower volatility in Q3 compared to Q2.  **[COIN_3404779_12]**  Focus shifted to Bitcoin and Ethereum following ETF approvals, which drove more volume to these assets.  **[COIN_3404779_12]**  The long tail trading correlates with volatility; less volatility means less trading in altcoins.  **[COIN_3404779_12]** 

8. **Stablecoin Trading Shift**  
   **Q:** Is trading shifting from USDC to Tether?  
   **A:** The increase in Tether trading reflects more stablecoin pair trading overall.  **[COIN_3404779_15]**  Management does not believe there's a shift away from USDC.  **[COIN_3404779_15]**  USDC was the fastest-growing major stablecoin in Q3, reaching new all-time highs of **$36 billion**.  **[COIN_3404779_15]**  They are integrating USDC more deeply across their products.  **[COIN_3404779_15]** 

9. **Retail Take Rate Sustainability**  
   **Q:** Is stablecoin mix shift structural or temporary?  
   **A:** Management does not view the shift to stablecoin trading as structural.  **[COIN_3404779_20]**  Mix varies each quarter; stablecoin trading depends on arbitrage opportunities, which may not exist every quarter.  **[COIN_3404779_20]**  Excluding stablecoin impact, advanced volume was slightly higher in Q3 versus Q2.  **[COIN_3404779_20]** 

10. **Crypto on Balance Sheet**  
    **Q:** Will Coinbase hold Bitcoin on its balance sheet?  
    **A:** Coinbase already holds crypto on its balance sheet, representing about **25%** of net cash after debt.  **[COIN_3404779_17]**  They allocate excess capital to building a crypto portfolio but need significant cash to support their business.  **[COIN_3404779_17]**  They are not aiming to be an investment company but to grow transaction activity in crypto.  **[COIN_3404779_17]** 

1d88ef7f3a44113a8638e4d79460e0a0ea48d053fe4b0a8508c7da9cd316b7e0

- **Regulatory uncertainty due to ongoing SEC litigation** introduces risks to Coinbase's operations. Despite the company's confidence in a favorable outcome, the lack of a clear timeline and potential for adverse decisions could negatively impact the business.  **[COIN_3373800_6]**
- **Lower take rates in derivatives trading** might limit revenue growth despite increasing volumes. While Coinbase is expanding its derivatives offerings, the focus on gaining market share involves **competitive pricing**, which could further impact margins.  **[COIN_3373800_14]**
- **Operating expenses exceeded guidance**, and there is potential for expenses to grow if the business scales up, posing concerns about scalability and profitability during a bull market.  **[COIN_3373800_11]**

e3aee3c809a4541fb8755343a184eca92a081055eaf941a21668ed0f989e0e66

- **Strong Growth in Derivatives Trading**: Coinbase is experiencing significant growth in derivatives trading volumes on their International Exchange, hitting daily all-time highs, including a recent milestone of **$700 million** in 24-hour volume. The derivatives market represents approximately **75% of all crypto trading volume**, indicating substantial potential for further growth.  **[COIN_3373800_14]**
- **Positive Impact from Bitcoin ETFs**: The approval and launch of Bitcoin ETFs have been net positive for Coinbase, leading to elevated engagement and net inflows across both retail and institutional clients. Coinbase won **8 out of 11 spot Bitcoin custody mandates** and now custodies about **90% of the $36 billion** in Bitcoin ETF assets, enhancing revenue through custody, trading, and financing services.  **[COIN_3373800_2]** ,  **[COIN_3373800_13]** ,  **[COIN_3373800_18]**
- **Growth in Institutional Business through Coinbase Prime**: Coinbase's institutional offering, **Coinbase Prime**, which has a higher fee rate than the exchange, has seen strong growth. This contributes to increased institutional transaction revenue and positions Coinbase to benefit from increased institutional adoption of crypto assets.  **[COIN_3373800_13]** ,  **[COIN_3373800_15]**

74849caea94fc5e5a35d217e920c944274020cc07264c4f0c0fb69599a92a092

1. **Institutional Business Growth**  
   **Q:** What's driving the institutional take rate increase?  
   **A:** Strong growth in **Coinbase Prime**, which has a higher fee rate than the exchange, led to a larger share of volume in **Q4**, increasing the blended average fee rate on institutional revenue.  **[COIN_3373800_13]**  The approval of **Bitcoin ETFs** has been net positive, driving elevated engagement and net inflows on institutional and retail in **Q1** to date.  **[COIN_3373800_13]** 

2. **Retail Take Rate and ETFs**  
   **Q:** Will Bitcoin ETFs cause retail fees to decline?  
   **A:** Despite Bitcoin ETFs, **Coinbase** has not seen fee compression or cannibalization on its platform.  **[COIN_3373800_17]**  Customers continue to choose **Coinbase** for its product breadth and security.  **[COIN_3373800_17]**  ETFs have been net additive, with **$4 billion** of net inflows industry-wide since their launch.  **[COIN_3373800_17]** 

3. **Operating Expenses in Bull Cycle**  
   **Q:** Will OpEx rise if revenue grows in a bull market?  
   **A:** Variable costs like transaction expenses, including miner fees and staking rewards, will track with revenue growth.  **[COIN_3373800_11]**  Other variable costs, like customer support, may increase modestly.  **[COIN_3373800_11]**  **Coinbase** can absorb significant volume growth without adding expenses.  **[COIN_3373800_11]**  In a prolonged upmarket, they may choose to increase expenses but will communicate transparently.  **[COIN_3373800_11]** 

4. **Derivatives Trading Growth**  
   **Q:** How is derivatives scaling and future potential?  
   **A:** **Coinbase** is hitting daily all-time highs on its International Exchange.  **[COIN_3373800_14]**  In **Q4**, they added 11 new markets, now covering about **70%** of global TAM.  **[COIN_3373800_14]**  They traded about **$16 billion** in notional volume in **Q4**  **[COIN_3373800_14]** , and recently surpassed **$700 million** in 24-hour volume.  **[COIN_3373800_14]**  Derivatives trading is the majority of volume but with lower take rates.  **[COIN_3373800_14]** 

5. **Owning Bitcoin vs ETF**  
   **Q:** Benefits of owning Bitcoin outright versus an ETF?  
   **A:** **Coinbase** has strong advantages in custody solutions and Prime services, attracting customers who want to own Bitcoin directly.  **[COIN_3373800_18]**  Most customers own more than **two crypto assets**, and in **Q4**, **42%** of trading volume was in assets other than Bitcoin, Ethereum, or USDT.  **[COIN_3373800_18]**  ETFs introduce new capital, but customers often explore other assets and services on the platform.  **[COIN_3373800_18]** 

6. **Prime Business Details**  
   **Q:** What services does Coinbase Prime offer, and how is it monetized?  
   **A:** **Coinbase Prime** is a one-stop shop for institutions, offering custody, trading, and financing services.  **[COIN_3373800_15]**  Institutional transaction revenue largely comes from trading, while custodial fees are reported separately.  **[COIN_3373800_15]**  Financing is included in other subscription and services as it is nascent and growing.  **[COIN_3373800_15]** 

7. **Sales and Marketing Spending**  
   **Q:** Why is sales and marketing spend flat despite growth opportunities?  
   **A:** A large part of spend is in brand marketing with seasonality due to an **NBA contract**.  **[COIN_3373800_16]**  They will spend materially less on that in **Q1**, leading to a slightly down guide.  **[COIN_3373800_16]**  **Coinbase** continues to invest where they see strong ROI, including testing policy marketing.  **[COIN_3373800_16]** 

8. **Payments Strategy and Monetization**  
   **Q:** What's the vision and revenue model for payments?  
   **A:** **Coinbase** is exploring payments in **2024**, focusing on reducing transaction costs and times.  **[COIN_3373800_10]**  Use cases include emerging markets, cross-border payments, B2B, remittances, and earning yield.  **[COIN_3373800_10]**  Monetization is early-stage with opportunities via **Base** and **USD Coin**, but no forecasts yet.  **[COIN_3373800_10]** 

9. **Legal Challenge Against SEC**  
   **Q:** Status of challenging SEC's refusal to engage in rulemaking?  
   **A:** **Coinbase** filed a petition in the Third Circuit Court challenging the SEC's decision.  **[COIN_3373800_18]**  Briefing begins next month and continues into the spring.  **[COIN_3373800_18]**  They are confident the court will side with them.  **[COIN_3373800_18]** 

10. **AML Investments and Congressional Statements**  
    **Q:** Reaction to Congress confirming crypto isn't a popular tool for terrorists?  
    **A:** **Coinbase** is pleased with the correction of the record.  **[COIN_3373800_12]**  They have significant investments in AML, with a large compliance team and best-in-class approaches.  **[COIN_3373800_12]**  Undersecretary confirmed that traditional finance is preferred by bad actors.  **[COIN_3373800_12]**  **Coinbase** is proud to be one of the most compliant crypto companies in the world.  **[COIN_3373800_12]** 

fb87084188c2bea56b5eca0b1169b5c785fb0ae37406b80edb0e1d7dba33de61

Coinbase Global Inc (COIN)

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