Coinbase (COIN): The Bitcoin & Crypto Trading Hub

The US Crypto Exchange

Over the past decade, digital assets like Bitcoin and Ethereum have been by far the best-performing financial assets. Their adoption by an increasingly large segment of the public and financial institutions was built on cryptocurrency exchange platforms, working as central nodes for buying and selling crypto.

Among these exchanges, the largest based in the US is Coinbase, an early mover in this segment, founded in 2012. The company has been publicly traded since 2021.

As crypto becomes mainstream, the acceptance by regulatory authorities is changing as well. Most notably, the Trump administration announced the creation of a Bitcoin strategic reserve, which will hold other crypto as well.

This could be positive for Coinbase, as it also looks to revive an effort for tokenized securities in the US market.

Coinbase Overview

Coinbase By Numbers

Coinbase is a cornerstone of the crypto ecosystem: a total of 245,000 ecosystem partners interact regularly with Coinbase, with $439B in quarterly trading volume, and $404B in assets on the platform.

It is present in 100+ countries and employs 3,700+ people.

In 2025, Coinbase had 8 million active accounts and was the world’s largest custodian of Bitcoins, holding 2.4 million BTC. This represents no less than 12% of the entire supply of Bitcoin.

You can read more from us about the pros and cons of Coinbase as a crypto exchange in “Coinbase Review – Is it Really the Best Platform? (March 2025)”.

Coinbase History

Coinbase was founded by ex-Deloitte consulting and ex-Airbnb engineer Brian Armstrong, a graduate of the William Marsh Rice University in Texas, with degrees in economics and computer science. He is still today the company’s CEO.

He founded Coinbase in part after seeing firsthand the difficulties of sending international payments when working at Airbnb. In the whitepaper for Bitcoin by Satoshi Nakamoto, he looked to develop a way to buy and store cryptocurrency as a side project.

A year later, an ex-Goldman Sachs trader, Fred Ehrsam, also joined the company as a co-founder. Ehrsam would later also create the venture investment firm Paradigm, which specializes in cryptocurrencies and blockchain technology.

Source: Paradigm

By 2014, Coinbase had already grown to 1 million users and was starting to help companies like Dell (DELL -1.63%), Expedia (EXPE -4.72%), or Time Inc. to accept Bitcoin payments.

Coinbase started its international expansion in 2015, in Canada and Singapore. By 2017, Coinbase was the first unicorn ($1B+ valuation) company in the crypto space.

In 2018, it started to offer ‘Prime’ – platform dedicated to institutional customers as interest in Bitcoin among financial institutions grew.

In 2021, Coinbase started to trade on the Nasdaq through a direct stock listing (DPO)

Coinbase Mission & Business

Coinbase sees itself as “on a mission to increase economic freedom for more than 1 billion people”.

We’re updating the century-old financial system by providing a trusted platform that makes it easy for people and institutions to engage with crypto assets, including trading, stacking, safekeeping, spending, and fast, free global transfers.

Besides Coinbase, the main app and crypto exchange, the company has a series of complementary offerings:

• Coinbase One, a premium membership service offering zero trading fees, boosted staking rewards, and deals with partners like crypto tax calculator, crypto research, etc.
• Coinbase Advanced, for professional crypto traders.
• Coinbase Wallet, for self-custody of cryptocurrencies out of exchanges, as well as NFTs.
• Coinbase Earn, a stacking service where cryptocurrency owners can lock their crypto in order to earn interest from the network, with $230M earned by Coinbase’s customers in 2023.
• Coinbase Card, a Visa debit card to make purchases using cryptocurrencies, with 1% back in Bitcoin when paying with USD, and 1.5% in USDC when paying with ETH. The card is accepted everywhere Visa debit cards are accepted.
• USD Coin, USDC, a digital stablecoin with a value equal to the US dollar, is looking to create a “digital dollar”.

Coinbase is a key partner for many Bitcoin ETFs for which it holds custody of the Bitcoins, making it an important actor in the industry for these products, making ETF ownership easier for individual and institutional investors.

Coinbase has no physical headquarters and works as a “remote only” company.

USDC

In September 2018, Circle, together with Coinbase, released a consortium called Centre, which launched digital USDC pegged to the dollar.

The USDC is an Ethereum ERC-20 token and is also available on other blockchains like Base and Polygon. ERC-20 tokens are using smart contracts powered by the Ethereum blockchain. USDC is issued by Circle, and is the second largest US stablecoin worldwide, behind Tether.

It is pegged to the US dollar, with the 1 USDC = 1 USD exchange rate. This pegging was momentarily broken in March 2023 during the collapse of the Silicon Valley Bank.

In 2023, Circle announced that USDC was launching on 6 new blockchains, pushing further the development of a digital dollar. It is currently present in 18 blockchains.

Source: USDC

As part of this next chapter, Coinbase and Circle have reached a new agreement. Reflecting Coinbase’s belief in the fundamental importance of stablecoins to the broader crypto economy, Coinbase is taking an equity stake in Circle.

It can be purchased in most of the crypto exchanges, including Coinbase, Binance, Bitstamp, Crypto.com, Kraken, NuBank, etc.

USDC currently has $58.32B in circulation, with an all-time trading volume of $24.77T, and is available in 100+ countries. The market cap of USDC grew by 79% in 2024, with USDC payment on-chain growing by 224%

Coinbase and Circle will continue to generate revenue from USDC reserves interest income. Under the parties’ new arrangement, this revenue will continue to be shared based on the amount of USDC held on each of our platforms, and additionally we will now equally share in interest income generated from the broader distribution and usage of USDC.

Coinbase Compliance And Safety

Past Controversies & Investigations

As an entirely new sector of finance, using a revolutionary technology, crypto has often been a blind spot for regulators, who did not know how to deal with it.

Among others, a key issue was the status of cryptocurrencies being securities or not, and therefore under the regulatory control of the SEC or not. A secondary key question was the taxation that should apply to crypto and crypto gain, an issue that became even more crucial as crypto gains grew, with many new crypto millionaires and even billionaires.

This has led to regular tensions between crypto companies, especially exchanges like Coinbase, and the financial authorities.

For example, in 2017, the IRS ordered Coinbase to report any users who had at least US$20,000 in transactions in a year. Irregularities in Bitcoin Cash prices also saw investigation about insider trading.

More recently, in 2023, the SEC attacked Coinbase stacking products. Coinbase sued in response, looking for the regulator to make clear regulations regarding cryptocurrencies, putting an end to years of confusion and decisions often criticized as arbitrary.

Coinbase argued that crypto assets, unlike stocks and bonds, do not meet the definition of an investment contract, a position held by the vast majority of the crypto industry. As outlined in a U.S. Supreme Court case, a key test for whether an investment product is a security is whether people are investing in a common enterprise with the expectation of profit.

It took until 2025 for the lawsuit targeting Coinbase to be dismissed and the one targeting Binance to be paused. In its blog, Coinbase called the move “Righting a major wrong“, and considers this is “a victory not just for Coinbase, but for our customers, the United States, and individual freedom”.

New Respect For Crypto

This is likely reflecting a change in perception of cryptocurrencies and also reflecting the new pro-crypto stance of the newly elected Trump administration.

Most importantly, the US president nominated Paul Atkins to the SEC, who has in the past advocated for the deregulation of the financial industry.

“Atkins believes in the promise of robust, innovative capital markets that are responsive to the needs of Investors. He also recognizes that digital assets & other innovations are crucial to Making America Greater than Ever Before.”

President Trump

“This is a strong, forward-leaning pick. We look forward to a new SEC administration focused on promoting responsible innovation.”

Ji Kim – Chief Legal and Policy Officer at the Crypto Council for Innovation

This change in crypto perception, from a tech sensation to maybe even a “scam”, to a respected part of American finances and innovations, is also reflected in the leadership of Coinbase, which progressively integrated respected and politically connected people.

Currently, the company’s global advisory council includes figures like:

• Bill Dudley, Former President of Federal Reserve Bank of NY.
• Chris LaCivitas, President Donald Trump’s 2024 Co-Campaign Manager.
• George Osbourne, Former Chancellor of the Exchequer of the United Kingdom.
• Mark T. Esper, Former Secretary of Defense.
• Many former senators and congressmen, like Patrick Toomey, Tim Ryan, Kendrick Meek, and Kyrsten Sinema.

This newly established respect for crypto is also reflected in a 128% growth in institutional trading volume from Q3 to Q4 2024. This was linked to record inflows in Bitcoin ETFs, with a new record of $93.2B worth of Bitcoin in the ETFs.

Tokenizing $COIN

Coinbase is reportedly exploring the possibility of “tokenizing” its stock, currently listed “normally” on the Nasdaq (COIN -14.08%).

The way it would work would be by converting shares of Coinbase into digital tokens on a blockchain, specifically on Coinbase’s Ethereum layer-2 network, Base. This could increase accessibility, enabling fractional ownership and facilitating global trading.

The idea of tokenizing publicly traded stocks is a controversial one, as it could open the way to stock ownership without the usual regulatory framework passed by conventional brokers and banks. This would also further blur the line between conventional finance and blockchain-based finance, something that might be disliked by both classical banks and crypto purists.

This is not a new concept for Coinbase, which has developed a Blockchain Token Securities Law Framework to guide the industry. It could boost the company stock value, but also open the path to an entirely new segment of activity for the company, stock trading via trading of tokenized stocks, putting in direct competition with stock brooking companies like Interactive Brokers (IBKR -12.09%) or Robinhood (HOOD -16.61%).

I’m now excited that we may be able to reengage those conversations with the SEC’s task force, and that we may be able to bring forward security tokens.

We may be able to bring some international products that exist into the U.S. market that we know are broadly adopted by crypto traders around the world. And so I’m just excited to see innovation in the U.S. and bring more and more assets on-chain and be able to trade those in ways that are more efficient.

Alesia Haas – Coinbase CFO

Controversy

Politics

Coinbase has been controversial for taking a mostly apolitical stance on most of the hotly debated societal issues in the US, including initially the Black Lives Matter protests.

Its CEO confirmed that the company would avoid engaging in social activism, considering that such positions have politicized and hurt tech companies like Google or Facebook. It even actively offered a severance package to employees uncomfortable with that position.

Coinbase has been a bit political in its latest public announcement regarding the changing stance of the SEC regarding the company.

Coinbase went public in April 2021. As part of that process, the SEC reviewed our business model and S1 disclosures and allowed us to go public. Two years later, they sued us. That’s despite absolutely nothing changing in our business model.

What changed over those two years was the political leadership at the SEC. In its war against crypto, it acted as if it was above the law, usurping the power of Congress as set forth in the Constitution.

Crypto Ecosystem Direction

Another source of controversy has been the general question of the shape & direction Bitcoin and the crypto industry should be taking.

Many see companies like Coinbase as a trend of centralizing what should stay a fully decentralized system. The collaboration of Coinbase with investigations regarding crypto transactions that might have been used for illegal purposes, including without users’ consent, has also given it a bad image with some members of the crypto & blockchain community.

Overall, what makes Coinbase a powerful actor in the Bitcoin community and a central force in Bitcoin & crypto democratization is also what it is the most criticized for. It provides a more user-friendly option for using crypto, but as a result, it becomes a critical node and potential point of failure, while the initial vision of crypto was to fully decentralize finance.

So, Coinbase being publicly listed in the US and becoming systemic can be seen as an unnecessary risk for the concept of cryptocurrency and decentralized finance.

At the time, this level of regulation also meant that, for example, Bitcoin ETFs and other highly regulated products were seen as much safer, helping a wider adoption, including by institutions that would stay forbidden to buy Bitcoins without it.

This discussion is likely to be ongoing for the upcoming years, especially as many countries start crypto sovereign funds, normalize payments in cryptos, and maybe even launch their own central bank cryptocurrencies.

Growth Pains

Another criticism sometimes leveraged against Coinbase is poor customer service. The size of the company and its relatively lean and low-fee approach to businesses mean that most systems are as automatized as possible.

This can lead to issues when customers’ cybersecurity is insufficient, and their login information can be misappropriated and funds stolen.

Mistakes like locking accounts and slow reactivity of the customer service to solve the issue have also been reported.

Similarly, linked to explosive growth, the company website has experienced crashes after running a SuperBowl ad in 2020.

None of these issues are specific to Coinbase, and the company does not seem to be more affected by it than other major exchanges. Nevertheless, this provides a steady stream of complaints and bad press that investors need to be aware of.

Coinbase Financials

Coinbase generated $6.6B in revenue in 2024, with a net income of $2.6B and $3.3B in EBITDA. This was linked to a record-breaking Q4 2024, with $1.3B in net income.

In large part, Coinbase’s net income can be attributed to the $2.3B of subscription and service revenues.

Source: Coinbase

So, Coinbase is best understood as a company similar to a stock exchange, making money from providing services to traders and investors, more than a “Bitcoin company” whose profit would depend on the value of the asset itself. However, it is, of course, clear that like stock exchanges, periods of intense trading activity and speculation in a given sector tend to benefit exchanges like Coinbase.

Conclusion

From an early and ambitious start, Coinbase has grown into becoming a cornerstone of the Bitcoin and crypto industry, especially in US markets. This is why it has been chosen as a key partner for products like USDT stablecoin and Bitcoin ETFs (including by the finance & investment giant BlackRock).

This has by far not been a smooth ride, with the history of Coinbase reflecting the history of Bitcoin as a whole. The company had to deal with cybersecurity attacks, unclear regulations, and lawsuits by the SEC, and see its customer services and safety protocol playing catch up with the company’s growth.

There are, however, signs that the company is now entering into a new phase. The Trump administration has taken the most pro-crypto stance of any US administration until now, including with a now friendly head of the SEC; Coinbase is capitalizing on the mass adoption of Bitcoin ETFs to attract institutional investors; and even tokenization of equities like stock might be on the horizon, completely changing the scope of crypto potential to include the whole stock market.

So while volatility and risks are a given in the crypto space (and really all investments), Coinbase is well positioned to capitalize on crypto becoming increasingly mainstream through the growing trends of Bitcoin ETFs, stablecoin, and stock tokenization.

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