Two roads, the same destination Writing: Prathik Desai Compilation: Block unicorn Preface Hello everyone, good year of the horse. Last week, two highly anticipated emerging financial companies released their financial reports within 48 hours. Both companies' revenue did not meet expectations. And these two companies were immediately categorized into the same narrative framework: the cryptocurrency market is sluggish, trading volume is weak, and the good days are over. But this viewpoint completely misses the point. The stock price trends of Coinbase and Robinhood may be closely related to the price of Bitcoin (BTC), but their future development trajectory is not determined by BTC's performance in the fourth quarter. They are gradually moving away from the narrow definition that 'the fate of companies is closely linked to the cryptocurrency cycle'. Both companies are undergoing significant transformations - if you know where to look, you can see this from their financial data - but if you only focus on the complex data of the first quarter, you may completely ignore these changes. But things are actually not that vague. Just look at the data from the past few quarters and compare the series of product announcements released by the two companies over the past 12 months, and it will be clear at a glance. The long-term development trends of the two companies tell us their respective development directions, their bets on the future of finance, and crucially, when their development paths begin to intersect. In today's analysis, I will dissect their stories separately, and then explain their commonalities and which issues this reveals in the broader competitive field they are in. Part One: Coinbase - Infrastructure Bets Coinbase recorded a net loss of $667 million in the fourth quarter of 2025, which may give the impression that its performance was poor this quarter. But numbers need to be interpreted in conjunction with specific circumstances. During the quarter, Coinbase also incurred unrealized losses of $718 million in cryptocurrency holdings and a $395 million impairment loss on its investment in Circle. After excluding these non cash book losses, Coinbase still maintained adjusted profits for 12 consecutive quarters. The report shows adjusted profit of $178 million and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $566 million. Although this may be reassuring, there is one thing I think is more worth paying attention to. Coinbase's subscription and services (S&S) revenue in 2025 reached $2.8 billion, a 5.5-fold increase from the peak of the 2021 cycle and double that of 2023. This indicates that Coinbase's revenue base is constantly expanding, covering areas such as stablecoins, custody, and blockchain rewards. In the fourth quarter, the value of USDC held in Coinbase products reached a historic high of $17.8 billion, an increase of 18% compared to the previous quarter. Currently, Coinbase holds more cryptocurrencies than any other company in the world, accounting for 12% of global cryptocurrency holdings. However, this portion of income is extremely sensitive to changes in interest rates. When interest rates and cryptocurrency prices fall, stablecoin yields, staking rewards, and interest income from custodial balances all decrease. This can be seen from the company's performance guidance for the first quarter of 2026, which predicts that revenue from stablecoin and custody businesses will decrease from $727 million in the fourth quarter to $550 million to $630 million. Coinbase has systematically diversified its layout in multiple business areas, reducing its dependence on the cryptocurrency cycle, which should enhance investor confidence. At present, Coinbase has 12 business units with annual revenue exceeding $100 million, of which 6 units exceed $250 million and 2 units exceed $1 billion. Coinbase's acquisition of Deribit is the largest cryptocurrency transaction in history, allowing the company to capture the high volume derivatives trading market, especially during volatile spot markets. Coinbase's "Everything Exchange" vision is beginning to be reflected in more aspects beyond traditional finance. Earlier this week, Armstrong revealed on Twitter that the world's five largest systemically important banks (G-SIBs) are partnering with Coinbase. JPMorgan Chase has signed an agreement allowing customers to directly link their bank accounts to Coinbase. BlackRock's Bitcoin ETF custody service also operates through Coinbase's infrastructure. These attempts indicate that Coinbase's long-term goal is to become a settlement layer that large institutions can access during the financial on chain process. The prediction market recently launched by Coinbase also follows the same model for retail customers. The prediction market was launched two weeks ago, further expanding Coinbase's vision of "everything can be traded" by introducing event based trading. This has created a whole new asset class, bringing new sources of revenue to Coinbase and giving customers more reason to keep their assets on Coinbase instead of transferring them to other platforms. Although the short-term performance of this new business line may not be significant, its strategic intent is evident. How did I know? The prediction market has become Robinhood's fastest-growing business line, which is the best proof. Let's take a look at the other side... Part 2: Robinhood - Consumer Deep Game Robinhood's fourth quarter performance was actually good, but it was punished for some inappropriate reasons. Due to the decrease in cryptocurrency trading volume and the end of the football season, its revenue did not meet expectations, but for me, these are not the focus. The most notable feature is its average revenue per user (ARPU), which increased by 27% year-on-year to $191, while the number of paying users only increased by 7% during the same period. This indicates that Robinhood has earned more revenue from each customer without the need to rapidly expand its user base. Compared to the business model when it went public in 2021, this is a more diversified business model. Where does the growth of ARPU (average revenue per user) come from? Part of it comes from the fastest growing 'other trading revenue', which increased by 300% year-on-year to $147 million, driven mainly by forecasting the market. Part of the growth also came from the options business, with revenue increasing by 41% to $314 million. In addition, the growth of net interest income and gold subscription business also contributed to a portion of the revenue. Despite a year-on-year growth of over 40% in transaction based cryptocurrency revenue by 2025, Robinhood still generates $8 out of every $10 in revenue from non cryptocurrency businesses. This ensures that the company's dependence on the cryptocurrency cycle is relatively low. The biggest indicator of Robinhood's future development trajectory with a $300 million business is its predicted market performance. CEO Vladimir Tenev stated that this product line, which was launched less than a year ago, is the fastest-growing business in Robinhood's history, which highlights its importance. The product line achieved an annualized revenue of 300 million US dollars and a contract transaction volume of 12 billion US dollars in its first year, indicating a clear prospect for future development at such a rapid growth rate. Robinhood has also increased its investment in the prediction market by establishing a joint venture with Susquehanna, Rothera LLC. Rothera LLC acquired MIAXdx in January 2026. This transaction gives Robinhood its own CFTC licensed exchange and clearing house. This layer helps Robinhood build the infrastructure for predicting markets, enabling it to control pricing, contract selection, and economic models in these markets. Although the NFL season has ended, some short-term positive factors have made Robinhood's prediction market more resilient. In January, the trading volume of NBA contracts on this platform exceeded that of NFL contracts. The government shutdown also led to a significant increase in trading volume in the same week as the end of the NFL season. In addition, there will be the FIFA World Cup this summer, following closely behind the ongoing Winter Olympics. In addition, Robinhood is also building a brand new non sports field. In addition to predicting the market and Robinhood's current profit model (including options, margin, and gold subscriptions), there are other factors that will enhance investors' confidence in diversification. HOOD is also building its next layer of distribution channels through private equity markets, family investments, and banking businesses. Robinhood Banking was officially launched a few months ago, targeting the first batch of customers. As of the end of January, it had 25000 paying customers with a total deposit of $400 million. More than half of the customers have opened direct deposit services, which Tenev believes is the most encouraging signal. This means that these customers are transferring their financial lives into the Robinhood ecosystem, rather than just trying. But compared to this platform with a market value of up to 324 billion US dollars, a deposit of 400 million US dollars is still insignificant. Banking business is a long-term development process, and Robinhood must be prepared to face challenges in this regard. When the world is busy building a predictive market, I believe that the private equity market may become Robinhood's winning weapon, an area that few competitors have ventured into. Tenev also believes that the development scale of the private equity market may exceed the predicted market. Robinhood Ventures is a registered fund under Robinhood, aimed at providing retail investors with the opportunity to invest in private companies, and has not yet been officially launched. But last year, European users had already experienced it through OpenAI and SpaceX's stock token giveaways, although it also sparked some controversy at the time. Robinhood Ventures will be officially launched in the United States in 2026, with a huge potential market size. Tenev has repeatedly mentioned the ongoing $100 trillion intergenerational wealth transfer. If Robinhood can get a piece of the pie, even just as private equity assets shift from institutional investors to retail investors, it will greatly change its income structure. The greater challenge lies in how to manage customer expectations by clearly defining the boundary between tokenized equity and traditional equity. The private equity market as a source of income may be launched in 2026, but it may gradually become realized over a longer period of time. At first glance, the development paths of Coinbase and Robinhood may seem completely different with the same destination but different times. Indeed, they started from two extremes in the financial field. However, now they are moving towards the same vision: to become a financial super application. Their recent development history also confirms this. Robinhood entered the financial field through traditional means: offering commission free stock trading, designed specifically for users who feel that traditional brokerage fees are too high and operations are too complex. For the past five years, it has been building encrypted native infrastructure on top of traditional finance (TradFi). Nowadays, it offers margin accounts, gold subscriptions, credit cards, banking products, derivative exchanges, predictive markets, and tokenization strategies. Coinbase was born in the field of cryptocurrency, and at a time when most Wall Street companies were avoiding cryptocurrencies, it provided the most trusted way to purchase, store, and trade digital assets. In the past five years, Coinbase has gradually expanded from its core cryptocurrency business to existing consumer products in the traditional financial sector, such as stocks, subscription services, credit cards, and now the prediction market. The two are rapidly converging from opposite directions to the middle ground, where the competition for retail finance will unfold in the next decade. Predicting the market is currently the most clear stage to showcase their direct confrontation. Robinhood is leading in this area, taking the lead over Coinbase, which was just launched two weeks ago. HOOD also has its own exchange and clearing house, while COIN has partnered with Kalshi but has not signed an exclusive agreement. Tokenization will be another field with more complex competition. Coinbase sees it as an infrastructure issue, implementing on chain trading of bonds and securities through internal issuance of tokenized stocks and establishing regulatory relationships. At the same time, Robinhood sees it as a consumer access issue and enables trading by opening up the stock tokens of non listed companies. Both have chosen different paths to solve different aspects of the same problem. The private equity market may become the third area where these two companies intersect. Coinbase has achieved on chain capital formation through the acquisition of Echo, while Robinhood is taking the first step in bringing private equity investment to retail users through its Ventures subsidiary. Both companies are aware that the broader market will trust the party that can establish the deepest financial relationship and meet the growing needs of investors. Financial services are often one of the most difficult areas to be accepted by the market. People do not easily switch banks, brokers, and custodians. If a platform can allow users to manage their retirement accounts, bank card information, predict market positions, and ultimately manage their private equity investment portfolios, then it will be difficult for another platform to snatch customers from competitors.