Coinbase’s second-quarter revenue relies on USDC interest business to beat market expectations despite poor crypto market environment

Coinbase, a leading American cryptocurrency exchange, reported $1.4 billion in revenue for the quarter. The company also posted a net income of $36 million. This represents a decline in revenue by 11% compared to the previous quarter, attributed to a dip in cryptocurrency prices.

Growth in USDC Interest Business

Despite the revenue drop, Coinbase's business of offering interest on its USD Coin (USDC) stablecoin contributed to notable gains. The company's balance sheet grew to $7.8 billion, up by $733 million from the previous quarter. This growth is seen as part of the company's efforts to innovate within the crypto industry.

Regulatory Clarity and Legal Battles

Coinbase highlighted its achievements in regulatory clarity, describing it as a significant opportunity for industry innovation. The company is currently involved in a legal dispute with the Securities and Exchange Commission (SEC) over crypto asset policies. In its communication to shareholders, Coinbase emphasized the increasing importance of advancing crypto legislation. The Stand With Crypto initiative has garnered over 1.3 million supporters, signalling a bipartisan interest in crypto legislation.

Transaction Revenue and Base Network Growth

The exchange reported a total transaction revenue of $780.9 million for the quarter. However, this was a decrease of 27% from $781 million in the previous quarter. Notably, the number of transactions on Coinbase's Ethereum layer-2 scaling network, Base, grew by 300% quarter-over-quarter. The company attributed this growth to its focus on reducing transaction barriers and friction, improving efficiency, and lowering costs.

Partnerships and Role in Traditional Finance

Since going public in 2021, Coinbase has increasingly partnered with major asset managers, particularly in providing crypto custody services for Bitcoin ETFs. This signifies the company's expanding role in the traditional finance sector.