Coinbase Broke a Record But Competition is Increasing

Coinbase, as a publicly traded crypto exchange, has once again demonstrated its first-mover advantage by exceeding earnings expectations. However, a period of increased competition is beginning for investors.

The global crypto market has reached a value of $3.7 trillion due to institutional and retail investors turning to digital assets. President Donald Trump, who took office in January, laid the groundwork for Bitcoin to reach record levels by easing regulatory hurdles in the U.S., allowing leading players in the sector to go public.

Morningstar analysts stated, "While we believe that regulatory clarity around cryptocurrencies and stablecoins will provide positive support for volumes, it will also lead to increased competition," indicating that Coinbase’s premium pricing may come under pressure.

The crypto exchange Gemini, founded by brothers Tyler and Cameron Winklevoss, began trading on Nasdaq in September. Rival Bullish went public in August, while there are talks of Kraken going public in the first half of 2026. The increase in publicly traded crypto exchanges indicates the maturation of the market and represents the strongest challenge to Coinbase's dominance.

According to analysts, Coinbase has proven itself as the most trusted crypto company globally among institutional investors. However, as expectations for retail trading rise, the growing competition and the management's recent comments regarding increased customer demand for acquiring assets outside of crypto have drawn attention.

Coinbase ranks third globally among crypto spot exchanges, according to CoinMarketCap data, trailing behind Binance and Bybit. On Thursday, it exceeded Wall Street expectations with its third-quarter profits, supported by an increase in trading volume.

Coinbase CEO Brian Armstrong stated in a call after the earnings report that regulatory clarity in the U.S. and around the world supports growth in the crypto sector, but emphasized that this also means increased competition.

The company has expanded its product offerings through several acquisitions in recent years. These include the acquisition of the derivatives exchange Deribit for $2.9 billion in May and the investment platform Echo for $375 million that was completed this month.

Chief Financial Officer Alesia Haas noted, "We have always faced competition," stating that Coinbase continues to increase its market share, scale, and trading volume. Analysts expect Coinbase to maintain its appetite for acquisitions.

J.P. Morgan analysts said, "We believe Coinbase, with a leading market position and strong industry and government relationships, is in a favorable position to offer competitive bids as an aggressive acquirer." The exchange's shares increased by 5% in after-hours trading.