Coinbase's financial report - Summary of 2025, Outlook for 2026, and the revenue path of the exchange. I just finished watching Coinbase's Q4 2025 financial report. Although it's not good, it's not as bad as I imagined, because Coinbase's financial report basically represents the state of the industry. Coinbase's total cryptocurrency trading volume reached $52 trillion in 2025, an increase of 156%. This shows that the cryptocurrency industry as a whole will be better in 2025. Of course, we also know that the rebound after the tariff war stopped in the second quarter due to the coming of Trump in the first quarter. The expectation of the Federal Reserve to cut interest rates in the third quarter began to decline in the market in the middle of October in the fourth quarter. It can be said that in 2025, except for the market collapse caused by Trump, the mainstream cryptocurrency dominated by BTC has a good life, so the increase of trading volume also represents the increase of investors' interest in cryptocurrency at that time. In addition, even though the cryptocurrency market was very sluggish in the fourth quarter of 2025, Coinbase's revenue still reached $7.2 billion, a year-on-year increase of 9%. To be honest, this data exceeded my expectations. The fourth quarter of 2024 can be considered the golden period of cryptocurrency in this cycle, while the market was in a slump during the same period in 2025. After checking the data, I found that the main reasons for Coinbase's profitability are institutional trading and stablecoin returns. In the fourth quarter, the returns generated by retail trading decreased by 13%, but institutional trading increased by 37%. At the same time, institutional trading in such a poor market has brought the greatest returns in the past two years, probably from quantitative and market makers. This also indicates that compound combination trading is expanding in scale in the context of market downturn. In addition, the stablecoin revenue on Coinbase increased by 3% month on month. The stablecoin revenue mainly comes from the reserve interest of USDC. The more USDC stored in Coinbase, the more reserve income can be obtained. Coinbase's explanation for this is very straightforward. The increase in stablecoin revenue mainly comes from the growth of USDC scale, but it is partially offset by the decrease in effective reserve interest rate after the interest rate cuts in October and December. This is also the issue we have been talking about with Circle. When interest rates are lowered, the revenue in this industry chain will decrease, and CRCL, which cannot find new growth points, will face a very awkward situation. By analyzing operating expenses, we can roughly understand where Coinbase's main development direction is. Among them, development expenses are the most frequently spent by Coinbase, mainly due to the quarterly impact of Deribit and Echo acquisitions. The second highest expenditure is surprisingly general and administrative expenses, with a month on month increase of 8%. The month on month growth is mainly driven by transaction related amortization, legal activities, and policy related expenses. This includes political donations. The main source of the loss was actually investment, with a net loss of $667 million in the fourth quarter, mainly due to Coinbase's own cryptocurrency investment portfolio generating a loss of $718 million, as well as a loss of $395 million from strategic investments (including investments in CRCL). Looking ahead to 2026, I actually think the most valuable aspect of Coinbase's financial report is that it shows in advance how the industry will go in the next year using the "revenue structure". This report may not have much significance for retail investors and institutions, but it is necessary for peer exchanges to conduct research. The trading line may experience a structural differentiation in 2026, where retail investors may not immediately return, but institutions will continue to treat the market as an arbitrage and risk control arena. A typical signal has emerged in the fourth quarter of 2025, where institutional spot trading volume has declined compared to the previous quarter, but institutional trading revenue has surged by 37% compared to the previous quarter. This indicates that the real expansion in weak markets is not emotional funds, but rather a composite trading scale of quantification, market making, and cross market hedging. As long as the volatility remains high, the products are still abundant, and regulation does not suddenly tighten, the bargaining power of exchanges on the institutional side will be stronger, because what institutions need is not an exchange, but a set of infrastructure that can connect spot, futures, lending, custody, and clearing. So I see Coinbase burning money in two directions, one is derivatives and the other is a compliant 'Everything Exchange'. The development expenses increased by 16% compared to the previous period, and the general administrative expenses increased by 8% compared to the previous period, mainly from legal and policy related expenditures. These two sums of money together represent Coinbase's 2026 bet not on a bull market, but on expanding its license and product boundaries, bringing in derivatives, stocks, predictive markets, and payments in a compliant manner, and reaping the maximum incremental gains in the next cycle. @bitget VIP， Lower rates and more generous benefits