Coinbase simply posted the type of earnings report that makes two teams of individuals sweat on the identical time.
The primary group is clear, COIN shareholders who noticed the corporate swing right into a loss whereas crypto costs and exercise cooled. Coinbase reported about income of roughly $1.78B for the quarter and a lack of -$2.49 per share, when analysts had been searching for a revenue.
Inside Coinbase’s personal supplies, the story appears to be like like a enterprise nonetheless producing money, however taking an actual hit on the underside line, with a quarterly internet lack of $667M and adjusted EBITDA of $566M.
The second group is much less apparent: individuals who don’t personal COIN in any respect however nonetheless depend on Coinbase’s plumbing.
For those who purchased spot Bitcoin ETFs by way of a brokerage app since you wished publicity with out the headache of wallets and keys, most of that Bitcoin in the end sits with Coinbase.
When these ETFs launched, Coinbase turned custodian for almost all of the class, together with main merchandise like BlackRock’s IBIT, the place Coinbase is referenced within the fund’s supplies through Coinbase Prime relationships.
Over time, the market has piled into ETF wrappers laborious sufficient that Bitcoin ETPs have been reported holding about 7% of Bitcoin’s most provide, round 1.5 million BTC in that snapshot.
So when Coinbase “misses,” the emotional query folks ask is straightforward, is the custodian in bother?
That query is comprehensible, the framing is messy, and the numbers that fly round on social media can get foolish quick. The actual method to take a look at it’s sensible. Custody is supposed to be boring. Buying and selling is supposed to be cyclical. Earnings are the place these two truths collide.
Coinbase missed, and the miss landed on probably the most delicate nerve
Coinbase’s quarter fell brief as a result of the a part of the enterprise that appears like a on line casino throughout bull markets stopped appearing like one.
Coinbase’s transaction income dropped to about $983M, with client transaction income down sharply. That tracks with what lots of common folks have felt over the previous few months, fewer “everyone seems to be buying and selling” moments, fewer viral cash, much less late-night adrenaline.
That is additionally the place Coinbase has been making an attempt to vary its id. Subscription and providers income got here in round $727M within the quarter, and stablecoin income progress was highlighted as a tailwind in the identical reporting.
In Coinbase’s personal shareholder letter, the corporate additionally dropped a near-real-time datapoint, about $420M of transaction income by way of Feb 10, paired with a warning to not extrapolate too aggressively.
That’s the push and pull. The market needs Coinbase to turn into steadier. The market additionally punishes Coinbase when the quarter reveals how dependent crypto exercise nonetheless is on temper.
Even the dialog round Coinbase’s enterprise mannequin has cut up into tribes.
On X, MilkRoad leaned laborious into the “monetary infrastructure” narrative and pointed to a rising lineup of merchandise and extra steady income streams.
On the opposite aspect, skeptics framed the quarter as an indication that establishments are pulling again and that regulation may crimp stablecoin-related income.
Each teams are reacting to the identical truth, crypto has entered a section the place flows and coverage can matter greater than vibes, and Coinbase sits near each.
The custody query, what occurs if Coinbase has a foul 12 months
When folks hear “Coinbase is the custodian,” they usually image Coinbase taking directional threat on Bitcoin itself. That isn’t how custody is meant to work.
ETF Bitcoin is held on behalf of the funds. The fund shareholders personal shares within the ETF, the ETF owns the Bitcoin, the custodian safeguards it underneath a regulated framework. The larger operational dangers in custody are issues like controls, compliance, operational resiliency, and the power to satisfy the obligations of a certified custodian, not whether or not Coinbase has a weak buying and selling quarter.
That mentioned, the explanation that is such a charged matter is belief. Custody is the inspiration that lets a retirement account holder say, “I’m nice proudly owning Bitcoin publicity, somebody severe is holding the cash.”
So the true query for 2026 is much less dramatic and extra particular, does something on this earnings report change the chance of custody failures, disruptions, or a strategic retreat from the custody enterprise.
The brief reply is not any; nothing within the public earnings supplies suggests a retreat.
If something, Coinbase has spent years making an attempt to increase into the elements of crypto that behave extra like conventional market infrastructure. The corporate remains to be presenting itself as a platform that desires to deal with extra institutional exercise, extra funds, extra prime providers, and extra world derivatives.
That derivatives level issues. Final 12 months, Coinbase introduced the acquisition of Deribit, which is a really direct wager on the a part of crypto markets the place professionals spend most of their time.
Derivatives additionally are likely to hold buzzing when spot volumes cool, as a result of hedging and positioning by no means totally cease. Custody turns into one spoke in a wheel, and earnings turn into much less hostage to retail temper swings.
A quieter sign, US establishments have been appearing threat off
If you wish to perceive why Coinbase’s quarter felt heavy, have a look at the place the marginal purchaser has been.
Spot Bitcoin ETFs noticed about $4.57 billion in outflows throughout Nov and Dec, and round $1.8 billion has already left because the begin of 2026. That type of circulation regime adjustments the whole really feel of the market.
That is the place the custody angle connects to the earnings angle.
When ETFs are in regular influx, the entire ecosystem seems like it’s being institutionalized in actual time.
When ETFs leak for weeks, it feels just like the grown ups have left the room, even when the long run story stays intact.
Coinbase sits in the midst of that emotional swing as a result of it’s each a buying and selling venue and a serious piece of custody infrastructure.
The coverage subplot, stablecoin rewards have gotten the bargaining chip
Coinbase’s CEO can be telling you, in plain language, the place lots of the true threat sits.
In an X submit, Brian Armstrong mentioned Coinbase is concentrated on a market construction “win-win,” and highlighted that GENIUS handed six months in the past and is being re-litigated, with direct influence on clients. He additionally described ongoing engagement with the White Home and banks.
Individually, our protection has framed the present market construction negotiations round a trade-off, progress on a broader invoice, in alternate for restrictions on stablecoin rewards.
This issues for the earnings dialog as a result of stablecoin-related income is among the cleaner, steadier methods for Coinbase to develop with out counting on retail buying and selling frenzy. If reward-like options get boxed in, Coinbase can nonetheless construct a stablecoin enterprise, however the packaging adjustments, the expansion curve adjustments, and the investor narrative adjustments.
That’s the reason some commentators are treating this quarter as a coverage story as a lot as an earnings story.
So is Coinbase “in bother,” and what ought to ETF holders watch subsequent
Coinbase just isn’t a fragile startup anymore. It’s a public firm with a diversified set of companies, and with a strategic place within the elements of crypto that establishments really use. A weak quarter remains to be a weak quarter, and the market is allowed to be disenchanted, however disappointment is totally different from structural breakdown.
For the one that holds a spot Bitcoin ETF and simply needs to know if the custodian threat went up, here’s a grounded guidelines that tells you greater than the EPS headline.
First, watch custody focus and market construction, as a result of focus cuts each methods. It offers ETFs a clear operational spine, and it creates a single level of reputational failure for the class.Second, watch coverage headlines round stablecoins and rewards, as a result of the expansion combine shift at Coinbase will depend on it. The White Home, banks, and crypto trade triangle that Armstrong described in public just isn’t theater, it’s the enterprise atmosphere.Third, watch flows and the US premium, as a result of they telegraph whether or not establishments are leaning again in. The premium hole protection and ETF outflow reporting are alerts that the tape has been in a threat off temper, and Coinbase’s subsequent few quarters are going to mirror that.Lastly, watch whether or not Coinbase can hold executing on its “the whole lot app” ambition, as a result of the long run path out of cyclical earnings is to personal extra of the stack. Coinbase is pushing into inventory buying and selling and prediction markets in its broader growth story, and that’s a part of the identical effort to widen what Coinbase is.
The best option to say it’s this.
Coinbase lacking earnings appears to be like scary as a result of it reminds everybody how cyclical crypto might be. Coinbase holding a big share of ETF custody appears to be like scary as a result of it concentrates belief. Put these collectively and also you get an ideal social media storm.
The truth is much less cinematic and extra essential.
Coinbase is making an attempt to turn into the type of firm whose worst quarters look survivable, as a result of the enterprise is constructed on rails and providers that individuals hold utilizing when buying and selling slows.
That’s the wager buyers are pricing, and that’s the wager ETF holders ought to care about, as a result of boring custody solely stays boring when the operator stays steady, compliant, and dedicated to the job.
