Crypto’s two most prominent public companies have spent two years building businesses meant to smooth out the market’s swings. Their third-quarter results show how far that has gotten. Coinbase’s trading revenue fell by almost half from a year earlier, and its headline profit rested on gains from its own crypto holdings. Circle’s reserve income fell even as more USDC circulated, because the interest rate it earns on reserves was lower than a year ago. New lines such as stablecoins, derivatives and prediction markets are growing, but they have not yet replaced the old cycle.

We checked the figures against the companies’ own filings, and one widely quoted number needs correcting. Coinbase’s transaction revenue fell 44 percent from a year earlier, according to its earnings deck, not the 23 percent that one summary gave. Here is what each company reported, why the rate backdrop needs careful wording, and what the numbers do and do not show.

Coinbase: trading down, profit flattered

Coinbase reported results after the market close on October 29, according to coverage; the figures below come from its Q3 2026 earnings deck filed with the SEC, compared with its Q3 2025 shareholder letter. Total revenue was $1,215.6 million, flat from the second quarter and down 35 percent from $1,868.7 million a year earlier. Transaction revenue was $590.2 million, down 1 percent from the prior quarter and 44 percent from $1,046.3 million a year ago. Consumer trading contributed about $450 million, institutional $92 million, which was down 8 percent from the second quarter, and other $48 million.

Subscription and services revenue was $570.2 million, up 3 percent from the second quarter and down 20 percent from a year earlier on the deck’s recast base, about 49 percent of net revenue. Its parts: stablecoin revenue of $307 million, up 5 percent on the quarter; blockchain rewards, mainly staking, of $86 million; interest and finance fee income of $69 million; and other revenue of $109 million. The deck does not break out custody fees.

Net income was $718.7 million, against a $359.5 million loss in the second quarter and $432.6 million a year earlier. The swing comes mostly from gains on Coinbase’s own crypto holdings: AMBCrypto, relayed by BitcoinWorld, puts about $715 million of net income there, which we could not verify in the primary text. Adjusted net income was $77.7 million, down 82 percent from a year ago, and adjusted EBITDA was $332.9 million, up 60 percent on the quarter and down 58 percent on the year. Adjusted expenses were $975 million, down 6 percent on the quarter and 10 percent on the year. The company’s fourth-quarter outlook gives about $165 million of transaction revenue through October 25, with a caution against extrapolating, and subscription and services revenue of $550 million to $630 million, listing higher average interest rates as a driver. Coinbase’s shares fell 10.6 percent to $143.54 on October 30, according to BitcoinWorld, which cited the profit’s reliance on investment gains and insider selling plans disclosed in the filing.

The new businesses

The deck gives volume and activity figures for the growth lines but no combined revenue figure that would show whether they offset trading. Crypto derivatives volume was $963 billion, down 6 percent on the quarter and up 14 percent on the year, with the Deribit integration completed in October. Base, Coinbase’s layer-2 network, averaged $1.87 billion in borrow and lend balances, up 25 percent on the quarter, and tokenized stocks have passed $1 billion of volume on Base since launch. Prediction markets are running above $200 million in annualized revenue, with daily traders up more than 60 percent on the quarter. CoinDesk cites analyst estimates, not company data, that prediction markets and derivatives are about a quarter of transaction revenue and that roughly 60 percent of net revenue is recurring or not tied to spot trading. Those are estimates, so the diversification story is plausible but not proven by the filings.

Circle: more USDC, less reserve income

Circle’s headline numbers look strong, which is why the detail matters. Total revenue and reserve income was $865 million, up 17 percent from a year earlier and 23 percent from the second quarter. But $182 million of that came from a presale of the token for Circle’s new Arc blockchain, inside $207 million of other revenue. Without the presale, revenue would have been down about 8 percent from a year ago, a calculation by CoinDesk that our arithmetic from Circle’s release roughly matches.

Reserve income, the interest on the cash and Treasuries backing USDC, was $657.6 million, down 8 percent from a year earlier and 2 percent from the second quarter. The reserve return rate was 3.5 percent, down 61 basis points from a year ago. USDC in circulation was $73.9 billion at the end of the quarter, flat from a year earlier, and averaged $73.3 billion, up 8 percent. Our inference from those figures is that reserve income is roughly average balances times the return rate, so a larger balance times a lower rate produced less income. Distribution and transaction costs were $409.2 million, about flat from the second quarter and down from $447 million a year earlier. Net income from continuing operations was $226 million, up 5 percent from a year ago. Circle left its 2026 guidance unchanged: other revenue of $310 million to $330 million, a margin on revenue after distribution costs of 41.7 to 43.7 percent, adjusted operating expenses of $570 million to $585 million, and USDC growth of about 40 percent a year over several years. It also cut about 5 percent of its workforce with a $9.1 million restructuring charge, according to a secondary report.

The rate backdrop

A claim that rates declined needs careful wording. Circle’s 61 basis point drop is a comparison with a year earlier. The Federal Reserve held its target range at 3.75 percent to 4.00 percent on October 28 in a 10 to 2 vote, with two members wanting a quarter-point hike, according to the Fed’s own statement. Reports say the range was set by an increase on September 16, the first since July 2023, and that futures priced a further hike in December at around 84 to 85 percent on October 28; we saw those points only in secondary sources. So rates were lower than a year ago but are not falling now, and Coinbase lists higher average rates as a tailwind for the fourth quarter.

How the two companies share USDC income

The companies are linked through the USDC revenue share. Decrypt, citing Circle’s S-1, reported that Coinbase receives 50 percent of a residual share of reserve-derived revenue, rising as more USDC sits on Coinbase. CryptoSlate, citing Circle’s 10-K, reported that the agreement began in August 2023 for an initial three-year term and that Circle’s distribution costs tied to Coinbase were $1.4 billion in 2025 against $924.5 million in 2024. StablecoinInsider reports the agreement renewed on August 18, 2026, unchanged through 2029, with Coinbase receiving all reserve income on USDC held on its platform and half elsewhere; it does not name the filing. We did not see primary text for the renewal or the amount Circle paid Coinbase in the third quarter. Coinbase said average USDC held on its products was a record $22 billion, about 30 percent of USDC’s average market capitalization. For background, see our explainers on Circle’s Arc blockchain and stablecoins as financial infrastructure.

What we could not confirm

We read Coinbase’s earnings deck, not its shareholder letter, so custody fees and Coinbase One revenue are not broken out, and we have no dollar figures for derivatives, prediction-market or tokenized-stock revenue. We could not find where the 23 percent transaction revenue figure in one summary came from. The Fed’s path before September and the primary text of the September decision were not confirmed, and the stablecoin figures in CoinDesk’s article do not match the deck’s, probably because they measure different things, such as net of rewards. Share price moves are from secondary reports.

Why it matters

The quarter is a reminder that diversification has to show up in revenue, not volume. Coinbase’s growth lines are real but small next to a trading business that fell 44 percent, and its profit came from the market, not the operation. Circle’s income depends on balances times interest rates, so it can grow USDC and still earn less. The next tests are Coinbase’s fourth-quarter transaction revenue, the Fed’s December meeting and whether the new businesses start showing up as revenue lines in their own right. This is reporting, not investment advice.

Further reading

Frequently asked

How much did Coinbase’s transaction revenue fall in Q3 2026?

Transaction revenue was $590.2 million, down 44 percent from $1,046.3 million a year earlier and down 1 percent from the second quarter, according to Coinbase’s earnings deck. One summary gave 23 percent, which we could not reconcile with the filing.

Why did Coinbase report $719 million in net income?

Net income was $718.7 million, but adjusted net income was only $77.7 million, down 82 percent from a year earlier. A secondary report says about $715 million of net income came from gains on Coinbase’s own crypto holdings, which we could not verify in the primary text.

Why did Circle’s reserve income fall while USDC grew?

Reserve income was $657.6 million, down 8 percent from a year earlier. Average USDC rose 8 percent, but the return Circle earned on reserves fell 61 basis points to 3.5 percent, so more balances at a lower rate produced less income.

Did the Fed cut interest rates?

Not recently. The Federal Reserve held its target range at 3.75 percent to 4.00 percent on October 28, with two members wanting a hike. Rates were lower than a year ago, so Circle’s yield is down year over year, but they are not currently falling.

What is the Coinbase and Circle revenue share?

According to Circle’s filings as reported by Decrypt and CryptoSlate, Coinbase receives half of a residual share of USDC reserve-derived revenue, rising as more USDC sits on Coinbase, under an agreement that began in August 2023. A report says it renewed in August 2026; we did not see primary text for the renewal.