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Coinbase and Strategy: What Earnings Reveal About Two Crypto Exposed Stocks, and How to Trade Them With PrimeXBT
Coinbase reported a net profit of $718.7 million for the third quarter, up 66% from a year earlier, while Strategy reported net income of $19.5 billion. Much of those profits came from gains in crypto holdings rather than the companies' underlying operations.
Coinbase's operating income fell 87% to $61.7 million, while Strategy recorded a $20.9 billion unrealised gain on its bitcoin holdings against software revenue of $125.4 million. Both companies reported on 29th October, and both shares fell the next day as the Binance hack pushed bitcoin towards $76,000.
They are two of the best-known listed companies tied to crypto, but they carry that exposure in different ways. Coinbase earns money when people trade, hold and move crypto. Strategy holds Bitcoin and pays for it by selling securities. This article compares them on operating performance, revenue mix, bitcoin exposure and financing, then looks at how both can be traded as shares with a global broker PrimeXBT.
Coinbase: trading revenue fell 44% and gains on crypto made the profit
Trading activity weakened in the third quarter, putting pressure on Coinbase's transaction revenue and operating margins. Total revenue was $1,215.6 million, down 35% from $1,868.7 million a year earlier. Transaction revenue, the fees earned when customers trade, fell 43.6% to $590.2 million. Consumer trading fees dropped 46.6% to $450.1 million and institutional fees 32.1% to $91.7 million. Operating expenses fell 16.9% to $1,153.9 million, which was not enough to offset the lost revenue, so operating income fell 87% to $61.7 million from $480.5 million, according to the company's 10-Q filing.
Coinbase continues to generate a greater share of its revenue from subscriptions and services. Subscription and services revenue was $570.2 million, down 20.4% on the year but up 3% on the second quarter, and it now makes up 47% of total revenue against 49% for transaction revenue. Stablecoin revenue, the largest part at $306.9 million, fell 5.4% even though the average amount of USDC held in Coinbase products reached a record $22 billion, a gap that most likely reflects lower yields on the reserves behind it. Blockchain rewards fell 53.6% to $85.7 million, while interest and finance fee income rose 5.9% to $68.6 million.
Coinbase booked a gain of about $715 million on crypto held for investment, which it carried at $2.22 billion on 30th September, and a $26.1 million loss on crypto held for operations. Adjusted net income, which Coinbase works out without these items, was $78 million. A year earlier the same gain was $423.9 million, close to the whole of that quarter's $432.6 million net income.
On financing, Coinbase held $8.6 billion of cash and cash equivalents on 30th September, down from $11.3 billion at the end of 2025, against $5.9 billion of long-term debt and $0.7 billion of short-term borrowings. It bought back $1.19 billion of its own shares in the first nine months but only $5.3 million in the third quarter.
Despite the weaker operating results, Coinbase reported some encouraging developments. Coinbase's share of global crypto trading volume rose to 10.7%, a fourth straight quarterly gain, so it is taking share in a market where activity has fallen. Transaction revenue came in about $60 million above the roughly $527 million analysts expected, prediction markets passed $200 million in annualised revenue, and Coinbase One subscribers hit a record, up 24% on the year. The company also cut its 2026 adjusted expense guidance by $100 million at the midpoint, to $4.15 billion to $4.3 billion.
Strategy: a $20.9 billion paper gain on a bitcoin balance sheet
Strategy's results show just how sensitive its earnings are to changes in the price of bitcoin.
Operating income was $20.91 billion, against $3.89 billion a year earlier, and it came from an unrealised gain of the same size on the company's digital assets, which it holds at fair value. Revenue was $125.4 million, down 3% from $128.7 million and below the $127.2 million analysts expected. Net income was $19.53 billion, or $19.12 billion after $419.6 million of preferred dividends. That works out at $44.75 per diluted share, against about $8.17 expected, according to Strategy's results release. Fair-value accounting also cuts the other way: a fall in bitcoin flows through operating income as a loss.
Strategy held about 848,517 bitcoin on 25th October, bought for $64.02 billion in total, an average of roughly $75,446 each. At about $81,200, the price on 23rd October, the holding was worth $68.90 billion. Bitcoin then fell towards $76,000 on 30th October, less than 1% above that average cost, before recovering to just under $77,900. Each $1,000 move in bitcoin changes the value of the holding by about $850 million, so the $4.9 billion cushion over cost at $81,200 shrinks to roughly $0.5 billion at $76,000.
Strategy's financing model creates additional risks compared with holding bitcoin directly. It raised $21.23 billion of capital in the year to date, including about $5.41 billion of net proceeds from at-the-market share sales in the third quarter, and bought $14.33 billion of bitcoin. It also sold about $431.8 million of bitcoin to fund preferred dividends and buybacks of its STRC preferred stock, of which it has repurchased about $2.04 billion at an average of $97.39. The STRC rate is held at 12.00%, with dividends paid daily from 1st November.
Against those obligations, Strategy holds a USD Reserve of $4.83 billion plus $242.4 million of cash, $5.07 billion in all, which it says covers about 3.4 years of preferred dividends and interest. Its own measure of bitcoin held per share, BTC Yield, is minus 3.7% for the year to date, meaning the share count has grown faster than its bitcoin holding.
Side by side: two profits, two different exposures
For investors, the main difference is what drives each company's share price. Coinbase depends heavily on crypto trading activity, transaction fees and stablecoin income. Strategy is more directly exposed to bitcoin's price, alongside the cost of financing its holdings. These differences help explain why the two stocks can react differently to the same move in the crypto market.
Sources: Coinbase 10-Q, Strategy release, Bitcoin.com.
How the market reacted, and what to watch next
Both stocks declined on 30th October despite reporting substantial profits.
Coinbase dropped more than 12% to $140.70 in morning trading, its lowest level since February 2024. Barclays cut its price target from $149 to $120 and kept an Underweight rating, citing a sizeable cut to near-term EBITDA estimates, while Needham trimmed its target from $205 to $197 and kept a Buy rating. Strategy fell more than 6% to $132.20. The common cause was an exploit at Binance that the exchange estimated affected about $6.3 billion of assets. It pushed bitcoin down almost 5% in a day and set off more than $1.5 billion of liquidations in leveraged crypto positions within 24 hours, while technology stocks fell on worries about AI spending.
Coinbase fell more than twice as far as bitcoin, which suggests investors were marking down its earnings as well as the coin. Strategy's fall was only slightly bigger than bitcoin's, which is what a leveraged bitcoin holding would be expected to show.
Three things will shape the next set of results:
- Coinbase's fourth-quarter volumes. Transaction revenue through 25th October was about $165 million. Straight-line arithmetic over the whole quarter gives roughly $600 million, close to the third quarter's $590 million, but that was before the hack and the sell-off.
- Strategy's funding and leadership. CFO Andrew Kang steps down on 5th November, with Reza Virasteh due to take over on 1st January 2027 and Phong Le as principal financial officer in between. The release gave no mNAV figure, the premium of Strategy's market value over the value of its bitcoin. That premium largely decides whether selling new shares to buy bitcoin adds to bitcoin per share.
- Bitcoin against $75,446. That is Strategy's average cost. Bitcoin touched about $76,000 on 30th October, and below that average cost the holding is worth less than Strategy paid for it.
How to trade Strategy and Coinbase with PrimeXBT
For traders looking to gain exposure to Coinbase or Strategy without buying the underlying shares, PrimeXBT, a global multi-asset broker and crypto asset service provider, offers CFDs on both stocks, allowing traders to take long or short positions depending on their market outlook. With accounts denominated in USD, USDT, USDC, BTC or ETH, crypto traders can access these stocks while remaining crypto-native, using their Bitcoin or Ether holdings as margin without converting them into fiat.
Coinbase is more sensitive to trading activity and stablecoin income, while Strategy's share price is closely tied to Bitcoin and its financing costs. These differences can lead to different share price movements, as seen on 30th October. Sharp movements, such as a 12% fall in one morning, also highlight the importance of risk management. PrimeXBT's PXTrader 2.0 platform provides tools including stop-loss and take-profit orders, flexible leverage, and cross or isolated margin. Traders can also monitor liquidation prices, receive margin call notifications and benefit from negative balance protection.
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Beyond Coinbase and Strategy, PrimeXBT provides access to CFDs on other shares, Forex, commodities and indices, alongside crypto CFDs, Crypto Futures and Tokenised Stocks, all through the same platform. Traders new to CFDs can explore these markets on a free demo account, use the Discover section for real-time market data, trade ideas and macro news, and access 24/7 live chat support.
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About PrimeXBT
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Clients can access Forex, CFDs on indices, commodities, shares, crypto, and Crypto Futures, as well as buy, store and exchange cryptocurrencies. This unified experience extends across both the native PXTrader 2.0 platform and MetaTrader 5, supported by advanced risk-management tools and a wide range of funding options in crypto, fiat and local payment methods.
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