When Coinbase reports its second-quarter earnings on Thursday, it could mark a significant shift for America’s leading crypto exchange: transaction fees could stop being its top money-maker, supplanted by its proximity to USDC stablecoin issuer Circle.

When the company debuted on the Nasdaq in April 2021, Coinbase’s business was heavily reliant of transaction fees gleaned from traders using its exchange. In the first quarter of 2021, Coinbase raked in a sweltering $1.5 billion from transactions, according to a filing with the Securities and Exchange Commission (SEC).

At the time, that represented 86% of its total $1.8 billion revenue. But as digital asset prices have fallen, so too have Coinbase’s transaction revenues, sliding to $375 million in the first quarter of this year and representing only 46% of its total $773 million revenue. 

And as traders appear to be hibernating on its platform amid the chills of crypto winter, Coinbase has looked to subscriptions and services as a source of warmth, leaning into products like staking.

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Author: André Beganski

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