Author: Nancy, PANews

Coinbase is undoubtedly one of the important supporting forces for the advancement of crypto compliance in the United States. It promotes the implementation of industry-friendly policies through active political donation strategies. Recently, it has also sponsored the 250th anniversary parade of the founding of the United States in a high-profile manner, attempting to strengthen its influence in mainstream society and the political arena.

At the same time, Coinbase has continued to accelerate product innovation and ecosystem expansion in the past few months, significantly optimizing user experience and enhancing market confidence, and attempting to build a more diversified growth engine.

Inclusion in the S&P 500 drives stock price recovery, but profit model cannot hide hidden concerns

Since the beginning of this year, Coinbase has shown positive signals in a number of key indicators, with both its stock price and user activity rebounding.

In terms of stock price performance, as of June 16, 2025, Coinbase (COIN) stock price rebounded to $242.71, an increase of more than 60% since the low of $151.47 hit in April 2025. This wave of rebound benefited to a certain extent from the positive promotion of COIN's official inclusion in the S&P 500 index in mid-May 2025. As the first crypto company to join the S&P 500 index, it marks its increased recognition in the mainstream financial market, which undoubtedly provides solid support for its stock price. However, since the listing high of $342.98 in April 2021, its stock price has still fallen by about 29%.

According to Fintel data, 1,560 listed institutions have reported holding Coinbase shares, with a total holding of more than 120 million shares. Among them are heavyweight investors such as Vanguard Group, BlackRock, Susquehanna International Group, State Street Bank, Jane Street and Paradigm.

 Some listed companies holding COIN

At the same time, Coinbase still maintains a certain scale of user activity. According to data from website traffic monitoring agency Similarweb, Coinbase had 34.7 million active users in May, ranking second in the industry, second only to traditional brokerage and trading platform Robinhood.

However, behind the dazzling market performance, Coinbase's profit structure has great concerns. The 2024 financial report shows that the company's revenue of about US$4 billion comes from transaction fees, accounting for about 63% of the annual revenue (about US$6.3 billion). This model that is highly dependent on transaction fees makes its revenue extremely sensitive to the volatility and activity of the crypto market. In the first quarter of 2025 alone, Coinbase's transaction revenue fell 19% month-on-month to US$1.3 billion, indicating that the market transaction volume is facing obvious pressure. With the rapid development of the on-chain ecosystem, it is also gradually diverting transaction volume and user attention, intensifying the competitive pressure on centralized exchanges.

Not only that, Coinbase has recently encountered serious trust challenges. In May of this year, Coinbase publicly disclosed a serious data breach, which affected more than 69,000 users, with potential losses of hundreds of millions of dollars, which seriously impacted user trust and brand image. In addition, due to poor stock price performance and information disclosure issues, Coinbase has encountered class action lawsuits. The US SEC is investigating whether Coinbase exaggerated user data during its direct listing in 2021, focusing on the authenticity of its so-called "100 million verified users" indicator, which was quietly deactivated two years later. Data leaks and litigation storms also caused market panic and became one of the negative factors suppressing stock prices.

Multi-dimensional competition accelerates product chain and global strategic expansion

Faced with multiple challenges in the market environment, Coinbase is actively seeking diversified growth paths through product innovation and global strategic layout, striving to reshape its market competitive advantage.

On the one hand, Coinbase is promoting the in-depth expansion of its product and service lines. For example, in terms of perpetual contracts, Coinbase announced this month that it will launch compliant perpetual contract products in the United States, marking its official entry into the U.S. crypto derivatives market and filling the strategic gap of the lack of derivatives layout in the country for a long time. Limited by regulatory ambiguity and compliance costs, U.S. investors have long been unable to directly use highly liquid, highly leveraged perpetual contracts and can only trade through overseas platforms. However, as the regulatory environment gradually becomes clearer, the U.S. crypto derivatives market is ushering in a policy turning point. Summer Mersinger, a member of the U.S. Commodity Futures Trading Commission (CFTC), recently publicly stated that crypto perpetual futures contracts may be traded in compliance in the United States in the future, sending a positive signal to the market.

What is more strategic is that shortly before announcing the launch of perpetual contracts, Coinbase announced that it had reached an agreement to acquire Deribit for US$2.9 billion. Deribit is one of the world's largest crypto options and perpetual contract platforms, with a very solid institutional customer base and strong product depth. This acquisition not only set the largest-scale acquisition in the history of the crypto market, but also greatly enhanced Coinbase's voice in the crypto derivatives market.

In the payment scenario, Coinbase recently joined forces with Shopify and Stripe to promote the use of USDC in e-commerce platforms. Not only that, Coinbase has continued to deepen its crypto credit card business. Following the early rebate credit card trial, Coinbase recently announced the Coinbase One Card jointly launched with American Express, which is scheduled to be issued to the US market in the fall of 2025. Cardholders will enjoy up to 4% Bitcoin consumption cashback based on the size of their platform assets. It is one of the crypto credit cards with the highest cashback ratio in the market. In addition to enjoying Bitcoin cashback, cardholders can also simultaneously obtain additional benefits provided by American Express, including travel insurance, shopping protection, return protection, Amex Offers limited-time discounts, etc., and Amex's mature payment network and brand reputation will also enhance the acceptance and reliability of Coinbase One Card.

This credit card is only open to Coinbase One subscribers, which can strengthen the closed-loop effect of the Coinbase platform membership system. After paying a monthly subscription fee, Coinbase One members can enjoy a series of benefits including zero transaction fees, exclusive customer service channels, higher staking rewards, Base chain gas fee subsidies, etc., which significantly improves user stickiness. Since its launch in 2023, the subscription service has accumulated nearly 1 million users and has become one of the most stable growing business segments in the Coinbase ecosystem. In the first quarter of 2025, subscription and service revenue reached US$698.1 million, an increase of 9% from the previous quarter, and its share in total revenue continued to increase.

In the face of the increasing integration of CEX and DEX, Coinbase is also working on the on-chain transaction entry layer. Coinbase recently announced that it will integrate the Base network DEX into the main application to enable access to millions of on-chain assets. This move is similar to the on-chain competition strategy of CEX such as Binance Alpha. As the core promoter of Base, Coinbase's move will not only greatly increase the activity and liquidity of assets on Base, inject stronger network effects into the chain, but also strengthen Coinbase's position in the on-chain transaction entry dimension. Coinbase has also recently launched cbDOGE and cbXRP tokens on Base, which will also enhance Base's competitiveness and liquidity on the Layer2 network.

For developers, Coinbase launched the CDP wallet at the end of May this year, which is a new wallet infrastructure that combines account abstraction and custody entry. Users can fully control on-chain assets without having to manage private keys or rely on centralized custodians.

In addition, as the demand for Bitcoin from institutional investors continues to rise, Coinbase's asset management company launched a new fund, Coinbase Bitcoin Yield Fund (CBYF) in May this year. The fund is designed for non-US institutional investors to help institutional clients obtain stable on-chain income while holding Bitcoin. Its target annualized net return rate is 4%-8%, and the income is priced and distributed in Bitcoin. Abu Dhabi digital asset management platform Aspen Digital is one of the seed investors of CBYF and has been designated as the fund's exclusive distribution partner in the UAE and Asian markets.

After gradually improving its product matrix, Coinbase has also accelerated its global layout through global compliance expansion and integration of political and economic resources. For example, in terms of global compliance expansion, Coinbase is actively striving to become one of the first platforms to obtain a full European crypto business license under MiCA regulations. It has also obtained a virtual currency license issued by the New York State Department of Financial Services (NYDFS) in the United States; in terms of political and economic resources, Coinbase has also made frequent moves. For example, David Plouffe, former Obama campaign manager and senior Democratic strategist, recently joined the Coinbase Global Advisory Board; at the same time, Coinbase recently sponsored Trump's military parade celebration, and this funding behavior also caused public relations risks and public opinion controversy.

In general, Coinbase has taken a place in the mainstream financial system with its compliance first-mover advantage, political and economic resource support, and market recognition brought by inclusion in the S&P 500. However, in the face of an increasingly complex and changing regulatory environment and intensified market competition, whether Coinbase can effectively respond to policy risks, improve the diversity of its profit structure, and continue to win the trust of users will remain key challenges for its future development.