Crypto is one of the least linear, most volatile, industries out there. That also holds true for crypto companies such as Coinbase.
For example, Coinbase’s second-quarter 2025 earnings call Thursday (July 31) show a company treading a narrow path between innovation, compliance and resilience.
On one hand, it recorded a $1.5 billion unrealized gain on strategic investments, including from its stake in Circle, and a $362 million uplift from crypto asset holdings. On the other, the crypto platform’s core transactional revenues fell 39% quarter-over-quarter, reflecting softening volatility, weaker retail sentiment and deliberate changes in fee structures on stablecoin pairs.
Coinbase leadership also used the investor call to share that it is launching predictions markets and tokenized stocks for U.S. users in the months ahead. But the biggest story was in building stablecoin payments and gaining institutional trust.
“We see payments as the next big use case in crypto, and believe that the majority of all payments in the economy will eventually run on stablecoin rails,” said Coinbase CEO and Co-founder Brian Armstrong in a call with analysts.
“One of the biggest areas we are focused on is B2B payments. We think cross-border stablecoin payments is a $40 trillion opportunity and B2B is 75% of that,” added Armstrong. “It’s better if the sender and recipient both want to use the same stablecoin and actually the same underlying payment rail.”
Notably, stablecoin revenue rose 12% to $332 million, fueled by a 13% increase in average USDC balances held in Coinbase products. USDC usage also surged off-platform, and Coinbase attributed part of this momentum to an extended rewards program and growing adoption across commerce and payments.
The company’s share price was down by around 8% in after-hours trading.
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Payments Infrastructure Gains Traction
Coinbase’s crypto ambitions go beyond custody and exchange. In Q2, Coinbase advanced several initiatives aimed at making stablecoins part of everyday financial life, including USDC becoming a live payment option within Shopify’s platform, allowing merchants to accept dollar-pegged crypto with negligible fees and instant settlement.
In June, Coinbase launched the Coinbase Business product suite, offering plug-and-play tools for crypto invoicing, merchant payments and recurring billing. Coinbase One Card, a consumer-facing debit product linked to USDC balances and offering reward incentives, was also launched.
Amid a broader 26% decline in total revenue and a 39% drop in transaction-based income, Coinbase’s subscription and services segment fell only 6%. That category makes up nearly half of all net revenue.
Coinbase expects Q3 subscription and services revenue to land between $665 million and $745 million, driven largely by further gains in stablecoin market capitalization and adoption. Notably, July set a new all-time high in USDC market cap, though exact figures were not disclosed.
Base Chain, the Layer 2 infrastructure Coinbase is developing, also now supports real-time settlement of stablecoin payments.
Coinbase’s Q2 results also reflect growing institutional interest, particularly through its Prime Financing division and custodial services.
Assets under custody reached a record $245.7 billion, with Coinbase securing custody for eight of the top 10 public companies holding BTC. The company maintains more than 80% custody market share for crypto ETFs, bolstering its institutional brand.
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Moving Crypto From Speculation to Spending
Despite the promising signs, challenges remain. Coinbase’s stablecoin growth still depends in part on yield incentives, which may prove unsustainable long-term. Trading volumes — especially among retail users — continue to fall, and the broader crypto market is still recovering from 2022-2023’s reputational damage.
Moreover, the firm is navigating the fallout of a $308 million data theft incident, which impacted Q2 operating costs and may introduce reputational or regulatory scrutiny despite Coinbase’s voluntary customer reimbursements.
With USDC volume up, Base Chain scaling, and business-focused products like Coinbase Business and Shopify integration gaining ground, the company is pushing toward a vision of crypto not as a casino, but as connective tissue for modern finance.
