# Coinbase Revenue Diversification and Fintech Strategy

**Podcast:** The Milk Road Show
**Published:** 2026-02-18

## Transcript

So I think Coinbase is doing a lot of good decisions.
And I think right now the market is punishing them for not materializing all the investments right away into their earnings.
What's up, everybody?
It's LG Du Set here, and welcome to the Milk Road Show, the daily crypto show that is ready for a recovery, even if we got to wait until the next Olympics for it.
Jeez, nope, that's not true.
Today's February 18th, 2026.
We are recording this on February 17th.
While the market chops or bleeds, I've been gem hunting, and that's because, like many of you, I believe in crypto long term.
Or at least I'm looking for reasons to still believe long term and finding ways to double down on those reasons and that conviction.
The problem is there are so many tokens and stocks and everything to pick from out there.
So, like a lot of you, I often look to uh my colleagues in Milk Road Pro for some of that alpha, whether it's just looking at the community chats or even asking them one on one, what are you looking at?
Today our pro analyst Martin joins me to talk about Coinbase and how their revenue is changing, why he's super bullish on it despite last week's earnings, and maybe I will get a few other tokens and apps out of him in terms of things that he's bullish on for that long awaited recovery.
Today's episode is brought to you by Warbucks, the easiest way to trade crypto, bridge sends stablecoin payments, instantly simple, global, friction free, and some turn crypto tax chaos into confidence.
Martin, what's up, man?
Welcome back uh to the main show.
People see you in pro all the time, but I feel like you haven't been on the the actual podcast for for maybe a month or two.
Yeah, it's been a while.
Uh yeah, thanks for for landing me.
Okay, Martin.
So the one of the main reasons I really wanted to have you on this week is last week, Coinbase reported their earnings.
I think people were generally disappointed because there was a drop in revenue.
There's a lot of confusing uh uh noise going on for me right now, but like Brian Armstrong selling stocks.
I don't really know what's going on.
So I wanted you to come on and basically first of all, like break down for us what's happening with their earnings, why that's maybe bullish or bearish or whatever.
And then just kind of like let's just do a deep dive into the company and and and kind of overview everything that's happening there.
So let's start with telling me tell me about that earnings report last week and kind of what it meant to you in terms of the direction of the company.
I think Q4 was pretty tough for Coinbase, as for everyone in the markets, I guess.
And they also reported net income negative, meaning they lost some money on paper in Q4.
But in reality, when you look at adjusted uh EBITDA or adjusted net income, they were still profitable.
Uh the the key thing here is to understand that some of those companies they also have crypto portfolio on their balance sheet and they need to sort of report even those unrealized uh you know, PL.
So imagine you own some Bitcoin and Ethereum, and obviously Q4 was pretty brutal for for those assets.
So, like on your balance sheets, it appears as losses, but those are unrealized ones.
But you have to report those.
So that's why what makes the the you know the top line number looking like very negative and sort of um I'd say some people were super surprised to see that Coinbase is losing money and they thought that it's just because their business is struggling, which is not the case at all.
Um so if we just ignore those uh those unrealized loses on their on their uh crypto portfolio, they were still making uh a good ton of money.
I think uh adjusted earnings, adjusted a bit that was something about 500 million, and it's a better measurement of seeing how their core business is really doing.
So if you extrapolate everything else and just look at you know the core business, they are still still doing quite well.
And also I want to highlight that a couple key things that when you were listening to the earnings call or then going through those numbers what took took my eye and uh what's worth highlighting, I believe.
The first thing is they now have 12 product lines that are making more than 100 million uh AR, it means annualized revenue per year, so that's pretty big.
Um I think that will just that number will just keep growing as they are expanding to like many new articles and markets.
So they the whole point of their business is sort of to get to become less dependent and reliable on transaction revenues that are very sensitive to crypto prices, and yet I feel like a lot of people still see Coinbase as a as a crypto exchange and nothing else.
And right now, by the way, transaction revenues are still something around 40% of their total revenues, so still significant portion, but that debt ratio is is going down as the other revenues are just up and to the right.
And that's where I think people should focus more on.
That's the subscription and services fee that are less dependent to crypto prices and in general market cycles.
Those are more like durable and more recurring revenues that Coinbase is really focusing on.
So despite what markets are doing, they can still print a ton of money and make investors happy.
So also like when I was uh having a community call, I was saying I expect that Coinbase results are gonna disappoint.
And the the main the main thing for me is to listen how the team is going to talk about the other business lines that are not as famous and like that might not bring as much revenues yet, but that are getting uh attraction already.
So I think overall I was very not very bullish, but I think the results were positive, at least for me, because I'm not worried about this transactional part, this volatile part of their business.
I think crypto will do well.
I don't know if it's gonna be in three months or one year, I don't know, but I'm sure that there's going to be uh you know uh sentiment shift.
And once that happens, that part of their business is gonna bring uh a lot of money again.
But the rest of the their business is just getting bigger and bigger, and that's what makes me really bullish on on Coinbase.
And like one more thing is I'll just highlight also I think for all these uh platforms like uh Robinhood, uh New Bank, uh Revolute, the key thing to watch is how many assets is on that platform.
Because what you want to do is you wanna bring users and you want users to bring money because the more money you have on your platform, the more ways to monetize that money.
Like basically that's your market.
So the more money is there, you can find ways and bring more features, more products that you can monetize that balances on your platform.
And I think Coinbase reported that it was nine straight quarters where assets under management in in uh in unit basis are just growing.
So it it ignores the prices volatility.
But you know, if there was, I don't know, let's say hundred uh hundred uh uh Bitcoin in a couple of years ago, so now it's it's let's say 200.
Meaning, like not maybe not in dollar terms, but in unit unit base, it it keeps growing.
And I think that's super important.
And also like when you listen, all the people talking about Coinbase, I think their vision is just much, much bigger.
And I'm very bullish on you know, agenc um e-commerce and payments.
And I think that Coinbase is very well suited for to capture that emerging trend that might not be that obvious today, but I think in a couple of years it's it's gonna be it's gonna be huge.
And so overall, like retail part of their business is not doing like super well because prices are down, but the rest of their business is just keeps growing, and I think they are doing a great job at that.
So um I'm still I'm still bullish on on Coinbase.
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So is that is that is that drop in retail?
Is that do you think that that's due to price action?
Like is it or is that due to retail like not being present right now?
Like I'm just trying to understand what would be driving that down, I guess, especially in Q4 relative to the to the rest of Q or the rest of 2025, because there's the larger narrative is that retail hasn't really been here this like cycle, or now that the cycle's done over, we won't get into that.
But is is that like what what is that role of retail and why suddenly in Q4 is that revenue down?
Is I guess is kind of my my bigger question there.
Yeah, yeah, I think first of all, you have holidays, so usually it's you know, seasonality and Q4 is usually uh sort of muted.
I think Q4 2024 was uh an exception because Trump just won presidency, and then you know, all the hype that Trump is going to be next president and he's gonna support crypto.
So Q4 2024 was different, but um Q4 last year uh was quite muted.
Overall, like we could see all the DEX volumes and centralized exchanges volumes, like not just Coinbase, but also like uh Binance and like everyone else.
So there wasn't much activity, and it makes sense when when prices are not going up, people have less sort of incentives to do something, right?
So it's not like when Bitcoin is gonna hit new all-time highs, you you know, your your Uber driver is gonna ask you, like, hey, are you buying Bitcoin as well?
But that's not happening when prices start going down.
So it just correlates with the market sentiment, and that's how retail always always behaved.
And I think it will it will not change anytime soon.
Why did the market turn turn bullish on this?
And I want to look at you, you've created an amazing dashboard about all their lines of business.
So we're gonna dive into that next.
And if this is part of the answer, then let's just go right to it.
But I think one of the things that really caught people's eye over the weekend or on Friday, is that they had this kind of you know, I guess bearish looking uh report or earnings report on Wednesday or Thursday last week, and then on Friday, there the stock rallied, and it's also up today as well, which today is the Tuesday, yesterday, Monday markets were closed.
Uh what what's driving that rally at this point?
Like, why would we bounce back so quickly considering that the market initially took this in such a bearish way?
Yeah, um I don't really know.
I think the market, like maybe the first impression when you see the headlines that Coinbase is, you know, operating at loss, it might be like, wow, what what's gonna happen?
What what's going on here?
But then when you dig into the numbers, you you'll quickly learn that it's actually not that bad.
It's actually like uh pretty good.
Um so I think the first sort of panic was to sell, and then people took some time to think about it and like dig into the numbers and see like what's really going on, and then they might change their stance and like, oh, okay, it's not actually that bad.
It's like if we if we just filter out all the losses, unrealized losses on the balance sheet, we are still like making uh a good a good amount of money.
So it's not actually that bad.
So maybe I should like buy back because eventually, like I guess all the listeners, like you and me, including, we are all bullish on crypto in general, and like, yes, there is short-term volatility, and I don't know when the markets will bounce back up, but it will happen eventually, and once it does, again, Coinbase is in unique position to benefit from that hugely.
Just like last time, just like I mean, if we are in a deep bear market, Coinbase was absolutely a fantastic buy last time as well.
Uh, if you're buying in in late 2022, early 2023.
Let's look at their lines of business, Martin, because I think this is this is something you only showed me like literally minutes before we started recording.
Um, in terms of this amazing dashboard that you built that outlines all these 12 different lines of business that have uh like kind of a minimum of 100 million uh recur annual recurring revenue.
Um tell me about this, man.
So you've got cons consumer spot trading and stable coin revenue at the top, but take me through this.
Yeah, um, that's actually the the biggest source of revenue, the consumer spot, and that's like that's the thing that we all know and think about Coinbase.
It's okay, you it's a crypto exchange, so you will create account, you go you fund your account, and then you buy and sell Bitcoin, right?
Um it's still 40% of their business, but um over time that part is going to uh decrease their mark their share of their total revenues, I think, as the other parts are are going to be more significant, and some of them are getting a big uh traction recently.
So I think, and it's not just uh I think overall Coinbase strategy is to diversify their mix.
So they don't want to be you know super sensitive to the crypto prices, and they so they want to make sure that they can perform well even if there is a bear market, and not just for crypto, maybe even just for stocks.
Um yeah, I think as I said, going forward, we are going to see a much more revenue coming in from you know subscription and services fees, and that's that's a big part of their business that's feels like almost like unrecognized yet, and people are still not, yeah.
You can see here that that part of the business, this is annual subscription and services.
It's actually grew like six times over the last five years.
Right, it's the purple part on this chart.
No, it's it's like it's total, it's this whole category.
It's just uh oh, I see.
Oh, sorry, yeah.
It says okay, so this whole category is annual subs and services, got it.
Yeah, yeah.
So that's that's what I'm saying when okay, Coinbase revenue is still dependent on transactions revenue, but you can see here that the other part of their revenue, which is subscription and services, is just growing like phenomenally, and it did again six times over the last five years.
So that's you know, very impressive compounded growth.
And I think investors are gonna keep watching this, and okay, I need to reflect that in my models because this is becoming bigger and bigger, and who doesn't like when the chart is up and right only, right?
So um, yeah.
That's pretty good, man.
Yeah, because since since 2021, and for people that are just listening audio only, basically we're looking at a chart that stacks stable coin revenue, blockchain rewards, uh, their other subscriptions like Coinbase One, uh, and their interest and fees from all that, and charts them over the last five years from 2021 to 2025.
And the revenue from all that 2021 was 500 518 million, and then in 2025 was 2.8 billion.
So you're looking at a 6x in this in just this category in the last five years, and you expect this to keep growing, right, Martin?
Obviously.
Yes, I do.
What else can you tell us in these charts?
Because I feel like there's a lot more to learn here, um, especially when we look at all them stacks.
So, right now, consumer spot still makes up what 41% of their quarterly revenue, correct?
Um and their stablecoin business is 20%, and then and then that's a mix of kind of the subs and other things.
How do you expect this part to change?
Like, do you do you expect their consumer spot to to kind of uh decrease in percentage and maybe in actual revenue as these other services ramp up?
I think even this category, which is consumer spot, will need to be sort of split it away because right now you can only trade uh spot of like crypto spot, but I expect that Coinbase will eventually find way to also provide stocks and some other assets.
So, you know, because when we look at Robin Hood uh earnings, they the numbers are still up and to the right, and they are growing despite the crypto being down.
And that's because they still provide people with um they can trade stocks, and yeah, yeah, and uh futures and like many many other stuff.
Coinbase also has derivatives, but they still do not have stocks.
And I think stocks are you know, like the foundation, like if you are an investor the the odds are that you are not will be interested in stocks are pretty low.
So it's good to offer crypto spot, but you also need to offer uh at least US stocks.
I feel like that's what most people would love to see.
And like I know that Coinbase is trying to do something there, um, but I think in the future, there's going to be a uh different product lines.
So it's going to be crypto spot and then maybe like US equity spot and like world equities and and stuff like that.
So um it's not just about like everything else, uh like subscription services or stable coins and and like business payments and stuff like that.
It's also about like what people can actually trade on that platform.
And right now, yes, there are some derivatives like options and futures and perpetuals.
But I also expect that some people will demand like and really make a pressure on Coinbase to bring those US equities to the Coinbase app because that's what just makes sense to have there, right?
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You had written a while back, or maybe not a while back, back in November, Martin, in one of your pro reports, uh that's exclusive, only available to pro members.
Uh, you've written one entirely about Coinbase, and it was titled uh Coinbase Hidden Gem or Dying Giant.
Uh and obviously in here, you you shared similar views.
You also noted that Coinbase had a trajectory to $10 billion annual revenue.
And I think right now it's at three.
Do you still see that happening?
I mean, it's only been two, three months.
I don't think that that would massively change, but I feel like we've we've got to.
I think everybody had to kind of shift their perception of the market, at least of the current the more like the cycle narrative and the price action, but um any something like Coinbase, like their their stock is down, everything's down.
But I'm assuming that for you this thesis holds.
So can you tell me more about that and kind of how you see them tripling that revenue from here?
Well, the revenue in 2025 was 7.2 billion.
Uh oh, yeah, that's right.
So I was thinking the annual services.
Yeah, uh, I think I always try to look for what's my edge in in the trade.
And with Coinbase, I think my edge is that I try to understand the other businesses that uh Coinbase is trying to pursue.
And because sometimes that's the part that some people are missing.
And again, as I said many times, it's not crypto exchange anymore.
They are gonna they are offering so many services today.
And it's not just for retail, it's also for institutions.
I feel like Robin Hood is now trying to understand the Coinbase play and sort of do uh a similar thing where they they wanna also sort of get institutions interested in using Robinhood.
So that's my edge that I think Coinbase was the very first public company who really started to build blockchain.
Now they have uh their own blockchain, and they can pretty much now provide payment services, they can provide this agenting e-commerce.
They they also launched a new standard for Ethereum, how agents can actually use stablecoins and interact with the blockchains.
Um layer two built on top of Ethereum.
So whatever happens on Ethereum, like Coinbase can profit from that as well, because eventually it will be all interconnected, so it will be like one giant ecosystem.
Um so I think Coinbase is doing a lot of a lot of good decisions, and I think right now market is punishing them for not materializing all the investments right away into their earnings, but I think now they have an advantage because they are number one institution for uh whoever's interested in using or building on top on top of blockchains, and based in US, they are probably gonna call uh Coinbase and how how they could do it, what products they could use, and stuff like that.
So they they have always been sort of front-running the market, and I think now when we we get all the regulations and more clarity on how we could use this technology and who can use it, how who is gonna regulate it and those kind of stuff?
I think more demand will come.
And I think Coinbase will capture most of that market because they are number one player really here.
So that's sort of the edge that I keep seeing that people are missing.
And I think it will slowly start to materialize in their in their earnings uh pretty soon.
So I guess I guess my question is for for people that are investors and they're trying to be part of this trend and and and believe a lot of the stuff that you're saying.
Is there is the best bet to look at both Coinbase and Robinhood?
Or is it easier to kind of like pick a winner here?
And in your and I guess in this case, if they're listening to the show, it'd be Coinbase.
Um, but it's really hard to deny Robin Hood's success, right?
And they've they've done so well, they're moving so quickly.
In your article in November, you wrote that they were surging and Coinbase was stalling.
So, what how would you approach this uh strategically, let's say for the next couple of years, five, 10 years?
I think Robin Hood, I think you should you should own both.
They are both great businesses, and again, they are probably the best fintechs in the US that will give you exposure to you know this new disruptive financial system that we are building right now.
Assuming you want to hold something that generates some cash flows and you know is profitable.
So you don't necessarily need need to own like Ethereum or or Sol.
And I think when I when I think about Coinbase and Robinhood, I I see two different approaches.
One is Coinbase was first to realize that they will need to build the whole infrastructure by themselves from scratch.
And so they focused a lot of investments and talent into that, and now that's that part is ready, and that's why now they can not only tap into the sort the whole world of you know crypto users who have access to the internet, but they also can come to institutions or payment providers and say, like, hey, we have our own infra that is interconnected to the rest of the ecosystem.
So keep uh come and use our products.
So that's their part.
I think Robinhood, they took a different strategy.
It's a retail-driven platform, still like 90% is is just retail.
But what makes them different is that Robinhood provides uh stocks, and so despite like crypto is down, their earnings Q3, Q4, still up, still growth.
And it's mainly because people are still trading stocks, and stocks are like SP, Nasdaq, they are still hitting all-time highs.
So, like, why should people stop trading stocks when they are hitting all-time highs every day?
Just doesn't make sense.
And it it just confirms that what I was saying earlier, that when the the markets are going down, the volumes are going down and like the whole retail activity is going down.
But when something is at all-time highs, obviously the activity is picking up.
Plus, they were first to and they are very quick to ship products.
So, right now, the biggest revenue driver and the biggest growth on Robinhood is uh prediction markets.
So you you can, you know, you can sort of think about it as a as a betting platform.
So like you know, DraftKings or like you know, if you can bet on who's gonna win next champions league or you know, uh Olympic games in hockey or something like that.
That's sort of at prediction markets, and now that's what I think Coin Robinhood showed for Forex growth uh over the last quarter on prediction markets, so that's what's driving the growth.
But I think at the same time, imagine that also stocks are down as well as crypto.
I think then at that point, Robinhood earnings would really struggle, and I think that investors are still not reflecting that.
Because again, SNP all-time highs, everything's fine, nobody's worried, okay.
But you know, crypto is down, and now we might see that SNP is also gonna do some correction.
I don't know for how long.
Like, I don't want to get into that discussion, but then they they don't have as much product lines and sort of uh diversify products as as Coinbase.
I think Robin Hood also also have uh actually 11 product lines making more than 100 million per per year, but most of them are still transaction-based revenues, meaning people need to trade.
Those are volatility, volume-driven uh revenues.
So once people stop, the music will stop as well, and that might you know be troubling for for Robinhood investors.
So, like, I'm not saying it's it's bad or or good, I'm just saying those are two different approaches, and that's like I I don't think you you have to choose Robin Hood or Coinbase because right now they have sort of different strategies, and you can you can own both, and you will do pretty well.
I think they both provide a good exposure to this and new sort of fin tax world that is gonna disrupt the role.
So um having both of them is is a good choice.
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And you've written a lot about super apps and how these are going to be super apps that kind of do everything for us.
So I think that that's a really good, you know, narrative that you've you've championed at Milk Road and you and Kyle, and um we're gonna keep learning more about.
Last question I want to ask you, Martin, to kind of wrap it out is obviously we don't know what the next couple months, couple quarters look like uh for crypto and and like you're saying you're the stock market.
Um what uh regardless of volatility, price action, um, things happening in crypto, Clarity Act, any of that kind of stuff.
What is like the one key like metric or number that you are watching for Coinbase out of all their revenue lines or everything that they're doing?
What's the one thing that you that you really are gonna watch very closely?
Yeah, I would like to see that uh subscription and services fee uh revenue just keeps growing up.
And is that what's gonna drive that?
Well, all the product lines under that category.
So um I think there's like seven product lines that are under that category.
So and I think they're gonna bring even more products into that.
So I guess their stablecoin business is expected to grow because that's one of the bigger narratives, right?
Is that regardless of price action, like stable coins are just under like a meteor growth right now.
So that's something you would expect, obviously, to grow, especially with their contract in USDC.
Like you couldn't be better positioned uh than Coinbase.
Yes, but like I think they're the contract terms ends this year, so they will need to renegotiate with Circle this year, but also Fed funds rates are expected to be uh lowered down.
So all the balances that are making a lot of money for Coinbase will now make less money for Coinbase, right?
So we need to reflect that.
But I think it's going to be offset by by more supply as like more demand for USDS is there, then it will offset the lower yields that are gonna be available when you you buy US treasuries.
So I I would expect the stablecoins revenue to be flat because of like those two things that goes against.
So they will sort of offset each other.
Okay, so that's the thing to watch.
And I'm assuming you're gonna keep keep us updated uh on that and Milk Road for Milk Road Pro and and outside, and maybe we can have you back on after the next next earnings report to kind of tell us a little bit more about what they're they're they're bringing to the table and what's been happening.
Yeah, sure.
Cool.
Well, thanks, Martin.
Good to see you again, man.
Uh although I see you every day, but uh people on the podcast don't.
So thanks for coming on.
Um and uh thanks everybody for listening to Milk Road.
Hopefully you guys learned a little bit more about Coinbase and and what that means for their future.
Thanks, guys.
Have a good one.
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