Coinbase at Citi Conference: Strategic Growth in Crypto

On Wednesday, 03 September 2025, Coinbase Global Inc. (NASDAQ:COIN) participated in Citi’s 2025 Global Technology, Media and Telecommunications Conference. The event highlighted Coinbase’s strategic initiatives amidst the evolving cryptocurrency landscape, balancing optimism with challenges. The conversation with Alicia Haas, President and Co-COO of Coinbase, delved into regulatory clarity, partnerships, and expansion into new technological areas.

Key Takeaways

• Coinbase is expanding into decentralized exchanges (DEXs) and tokenized equities.
• Strategic partnerships with major companies like Amex and Chase aim to enhance customer experience.
• The company maintains a commitment to being EBITDA positive regardless of market conditions.
• Regulatory clarity is seen as a key driver for institutional adoption.
• Coinbase Ventures focuses on investing in innovative startups within the crypto ecosystem.

Financial Results

• Assets Custodied: Coinbase manages over $400 billion in assets, representing about 12% of the total crypto market cap, and holds twice the assets of its nearest competitor.
• Subscription Growth: The Coinbase One subscription program is expanding internationally, contributing to significant growth.
• Custody and Derivatives: Growth in custody business and institutional transactions is noted, while Derabit holds a 75% market share in options.
• USCC Milestone: USCC has reached an all-time high market cap.

Operational Updates

• Regulatory Engagement: Coinbase is actively collaborating with regulators, with anticipation for the Clarity Act passing in the Senate.
• Product Innovation: The company is integrating DEXs and developing tokenized equities and the BASE app, which combines trading, payments, and social features.
• Strategic Partnerships: Partnerships with companies like Amex, Chase, Shopify, and PNC Bank are crucial for growth.
• AI Integration: AI agents are being enabled to use crypto wallets for commerce payments.
• International Expansion: New markets are being opened up as part of global expansion efforts.

Future Outlook

• Regulatory Clarity: Expected to unlock institutional investor adoption and growth in crypto-as-a-service products.
• Tokenized Assets: Coinbase aims to bring every asset on-chain, working with the SEC for securities trading rules.
• BASE App Monetization: Focus on user engagement and platform growth.
• AI and Crypto: Continued investment in the intersection of AI and crypto, particularly AI agents with wallets.
• Financial Goals: Commitment to maintaining EBITDA positivity across all market conditions.

Q&A Highlights

• Retail Strategy: Emphasis on trust and ease of use, offering comprehensive crypto services.
• Competitive Strategy: Liquidity focus for the exchange and network effects for USDC and BASE.
• DEX Integration: Inclusion of long-tail crypto assets with consistent trading fees.
• Institutional Investment: Anticipated gradual growth post-regulatory clarity.
• Tokenized Equities: Efforts to gain SEC approval for offering tokenized equities.

Readers are encouraged to refer to the full transcript for a detailed account of the discussion.

Full transcript - Citi’s 2025 Global Technology, Media and Telecommunications Conference:

Unidentified speaker: Thinking about this last year, the conversation was very different. Isn’t it a different thing? What a year what a year of difference can make. Right? Well, before we get started though, I’m gonna read a safe harbor statement on behalf of Coinbase.

I’d like to remind you that during today’s session, the company may make forward looking statements. Actual results may vary materially from today’s statements. Information concerning risks, uncertainties and other factors that could cause these results to differ is included in Coinbase’s SEC filings. Our discussion today will also include references to certain non GAAP financial measures. Reconciliations to the most direct comparable GAAP financial measures are provided in the shareholder letter on the company’s Investor Relations website.

Non GAAP financial measures should be considered in addition to, but not as a substitute for GAAP measures. I should have this memorized by next. Anyway. Thank you for reading this. No worries.

No worries. But great to have you back. It’s like where do I begin? I think the first thing I’d love to touch upon and get your perspective on is the renaissance that has been that the sector has been undergoing in recent months. We’ve had tons of capital markets activity.

VC investments have rebounded back to pre crypto winter levels. And it’s funny, when we talk to some of these companies, a lot of it has been, hey, Coinbase has been public. They’ve had this competitive advantage by being a public company, having publicly filed financials, CEO, CFO attestation, that kind of thing. So it’s really a legitimacy thing that we need to become public so we can compete against them. Do you do you agree with that thesis?

And I’d love to hear your perspective on how you think the chess pieces have been moving recently.

Alicia Haas, President and Co COO, Coinbase: Oh, such a great area to dive into. Well, it’s great to be back. So thank you so much for inviting me this year. It has been a complete sea change in market conditions, but let’s reflect back. So reflecting back, I absolutely believe that transparency and disclosures have been needed in crypto and were beneficial to us as a company.

And so we got there through our disclosures by becoming a public company. We added to our disclosures. And if I look back at 2022, 2023, when we had the FTX bankruptcy, when we saw a lot of concern about counterparty risk and over leverage, having financial statements public that were audited, that had a controlled attestation was absolutely calming to our investors and our customers who could look at the balance sheet risks and understand the counterparty risk that they were taking. So I do think it augmented our most trusted brand, and I think it has given us an edge specifically for institutional clients as well as for partners who look at that balance sheet strength and our profitability and our ability to manage through the cycle. But I don’t think it’s just being public alone.

It gives us a competitive edge. And I think that it is going to be beneficial now with more companies going public to add to the transparency in the space and give customers the ability to compare and contrast and underwrite and compare business models as being an n of one public company. Pros and cons to that also. But I think that the key here is transparency is always positive. I think that regulatory environment has become a huge catalyst to growth.

And not only have we seen it unlock the capital market stores, but more importantly, much more importantly, it unlocks the product innovation doors. And getting to the place where we now can have meaningful conversations with regulators to open up the prospect of tokenized equities, to open up the prospect of bringing perps to The U. S. Perpetual style future derivatives, which we’ve already done. These have been the real sea changes that we see as adding value to our customers.

And we’re on offense on product now. It’ll bring more market participants in, but we’ve been doing this for twelve years and we are excited about our infrastructure tech stack and our ability to bring these innovative products to the market.

Unidentified speaker: That’s certainly makes a lot of sense. I can recall conversations. You talk to regulators and give them all your ideas, then the next day they would sue you. Yeah. It’s a lot easier these days for sure.

Alicia Haas, President and Co COO, Coinbase: We’re collaborative now.

Unidentified speaker: That’s that’s great to hear. Any views on, how you think some of the chess pieces are moving? Obviously, Circle was a very successful IPO as well as bullish, there’s more coming. And you could judge by the bags under my eyes, there’s even more coming. So you’re going to have a lot more public names to be compared against and things like that.

Any views on how you think the industry as a whole just evolves from this or benefits from some of this?

Alicia Haas, President and Co COO, Coinbase: Look, I think that the market was closed to many crypto companies, and they had no ability to

Unidentified speaker: get out while we were under the regulatory environment that

Alicia Haas, President and Co COO, Coinbase: we were in. So I definitely think many companies see the window open and are racing to run through that open window for fear that that window may not be open for long. I think that customers have been able to get information through operational due diligence for a long time, and I think we’re really pleased of our ability to compete and become a platform of choice for many large corporates. You can see that through our ETF custody relationships. You can see that through other business deals that we’ve announced.

And so I don’t think that being public or private is going to change the playing field that materially. I think it will give those companies access to capital liquidity. But more importantly, I think it will just give investors the ability to be more informed on market dynamics, understand the right questions to ask, get better insights into how to value. And so we’ll get to probably more rational valuations with more and more companies in the market.

Unidentified speaker: That’s very fair. Very fair. Thank you for that. I do want to spend a little bit of time on retail. And Brian’s pointed out at the recent Crypto Summit that you guys held, which is a great event.

Thank you. 50,000,000 Americans own crypto today, so there’s certainly runway to grow. And there’s also several of these hybrid more full suite offerings out there that are getting more competitive in by offering crypto. I’d just love to hear what’s Coinbase’s strategy to drive the incremental new user to its platform and versus some of these others, including some of the full suite broker dealers out there? And how do you feel that Coinbase One, the subscription program and the card that’s coming soon, how do you view these partnerships playing a role in your new user growth strategy?

Alicia Haas, President and Co COO, Coinbase: Yes. Thanks for that. So it all goes back to our strategy of being the most trusted and easiest to use crypto platform. From there, what we wanna be is the platform where we offer everything, every asset’s available. You can think of us as a one stop shop to find the asset that you’re seeking, to transact in that asset, to be able to do any of the economic transactions that are available in crypto.

So whether that’s staking, whether that’s budgeting it for financing, we want to be the full service offering. So it’s a combination of trust. I think what’s really important to me here is to think about crypto as bare instruments. And so we are offering a full infrastructure stack. We can custody assets.

We custody more than two times our nearest competitor. We have over $400,000,000,000 of assets that we safely store in our platform. It’s about 12% of total crypto market cap. That is two x any other centralized player. You know, offerings custody in traditional securities looks very different than offering crypto custody because of the bearer nature of the asset.

And it’s not a bearer instrument in the sense that I can lock it up like gold in a vault, and I only have to access it once every two years. No. This is like a twenty four seven trading asset that I also have to provide on chain liquidity and make sure I can execute. This is a really differentiated technical infrastructure stack that we offer. So we offer the custody.

We offer the wallets. We offer a protocol within base, we have a partnership on USDC as a stablecoin. So we have a full vertical stack. That, along with offering the breadth of assets, provides us a really unique advantage of being able to compete in this marketplace because we can monetize at different levels of the stack, we can attract with different value propositions, we can think about a future of cross margin, for example, when we provide spot and future side by side or spot future options, tokenized equities. So I think that we are building a very differentiated platform through the full stack approach, but it all comes back down to that brand of most trusted, easy to use.

And so then when I talk about retail specifically, absolutely, Coinbase one plays a big role here. Partnerships play a big role here. Coinbase one is a subscription program that provides our retail users added benefits to benefit of the breadth of our product offering. So it provides differentiated rewards rates on USDC, better staking rewards rates, lower trading fees in exchange for this recurring, more repeatable subscription revenue line. We’re seeing really nice growth.

And as we have broadened that to international users, as we offer different price tiers, we’re seeing continued traction and growth of that product. Partnerships, additionally, are unique ways to bring new customers to our platform that come through a very attractive customer acquisition cost differentiated from the standard growth and incentives that we offer through paid promotions, etcetera. So we’re seeing really nice traction. Pleased to see us be really a platform and partner of choice of large institutions looking to provide crypto at their end customers, which then benefits other products and services on our platform.

Unidentified speaker: Does the competitive strategy come down to liquidity? Is that is that really the the heart of it? Where whoever has the most liquidity wins?

Alicia Haas, President and Co COO, Coinbase: On the exchange, for sure. So every product has key attributes of what makes it win. Liquidity, I think, is definitely key for the exchange, and can you offer the deepest, most liquid trading pairs and so the best pricing on the brokerage? It’s network effect then with USDC. It’s network effect with base.

Do you have the most market participants to create two sided marketplaces that really want to adopt and unify product, interoperable product experiences on BASE, on USGC, using the BASE app, etcetera? So it’s a combination of liquidity and network effect.

Unidentified speaker: I do wanna talk about DEX trading

Alicia Haas, President and Co COO, Coinbase: Okay.

Unidentified speaker: Which Yeah. I think is super interesting.

Alicia Haas, President and Co COO, Coinbase: Does everybody know what DEX means here?

Unidentified speaker: Well, it’s you wanna

Alicia Haas, President and Co COO, Coinbase: You want me to

Unidentified speaker: do it? I I could do it too. But You

Alicia Haas, President and Co COO, Coinbase: can do that. Do wanna ask? Okay. DEX is decentralized exchange versus centralized exchange. These are protocols that offer a matching engine for people to trade various assets and trading pairs in an on chain manner.

Correct.

Unidentified speaker: And and one of the

Alicia Haas, President and Co COO, Coinbase: I’m glad I got it right.

Unidentified speaker: One of the more popular ones is like a Uniswap, something like that.

Alicia Haas, President and Co COO, Coinbase: Or hyper liquid today. Or correct. Correct. But

Unidentified speaker: how should and Dex volume has been growing significantly faster than centralized volume industry wide. How should we think about this integration potentially impacting the financial statements of Coinbase?

Alicia Haas, President and Co COO, Coinbase: All right. Let’s start with, yes, it’s been growing. And it is a key reason why we’re integrating DEXIS into our centralized exchange. So why are DEXIS growing? DEXIS are growing because they offer users access to what I consider the long tail of crypto.

These are the meme coins. These are the new assets that are issued where they can spin up order books instantaneously. So for example, when the Trump coin was launched over the holidays, instantly that was on the decks. There are steps for Coinbase to be able to offer assets on our centralized exchange. We do robust legal analysis, compliance views.

We make sure that we can do on chain tracing for compliance monitoring, etcetera. So the decks moves with speed. It often has lower barriers to entry. People have self custody wallets, so there’s no KYC. And that has created a lot of adoption, especially when you look for these high vol, long tail assets.

People have a lot of interest in those. So we wanna give our customers access to all of that. We also wanna give them access to a centralized exchange because that provides incremental benefit. So centralized exchanges typically have lower latency. You can get better pricing because of the deep liquidity that are offered on them.

You can create the fiat to crypto on ramps. You can connect to banking partners and create the bridge between the traditional finance and the on chain worlds. We can offer product experiences that are differentiated. We can offer staking with rewards. We can have USDC rewards.

We can create the integration between custody and trading for you to be able to sweep into a more highly secure. So there’s differentiated benefits by centralized exchange. So we are absolutely adding assets to our centralized exchange, but we wanna provide the long tail as well and be able to move with speed such that we become the everything exchange. When you think of a new asset, you just have to come to Coinbase. You don’t have to source that asset out in the ecosystem.

And so that’ll get us into economics. For the ability to be a one stop shop, we do offer the same trading fees on the decentralized exchange that we do on our centralized. There’s no spread on decentralized, but there is the same trading fee.

Unidentified speaker: K. That’s helpful. Thank you. Mhmm. A big topic of late certainly is is the Clarity Act, which passed the house now is in the senate for and and and hopefully, we’ll have some news on that Hopefully.

Coming weeks. I think the biggest question that we’re getting from investors is what happens after clarity. And I guess there’s this view that this is big U. S. Institutional investor unlock that clarity prompts, hopefully.

I’d love to hear your view of at least your expectations on how you think The U. S. Institutional world behaves after clarity. Is it something that you see gradual adoption and growth? Or do you have hedge funds banging out the door right now, getting ready, doing prework?

How should we think about this?

Alicia Haas, President and Co COO, Coinbase: So regulatory clarity is the number one reason that we hear of institutional investors sitting on the sidelines. Now plenty of hedge funds have already jumped in to crypto, but the folks who haven’t jumped in are the banks, are the traditional RIAs. So there’s a lot of capital that is still sitting and waiting for the regulatory clarity to emerge. Like anything, I don’t think this is like a big bang, like instantaneously, they’re all ready to trade. I think everybody has been waiting for regulatory clarity.

And then post regulatory clarity, they will continue to assess how do I want to offer crypto to my customers? How do I want to build it into my portfolio strategies? Which partners do I wanna work with, etcetera? How do I wanna build the pipes? So I do think it’ll be a slower ramp to growth, but I absolutely think it’ll be another sea change of unlock of growth similar to how the ETFs grew, similar to how you’re seeing the treasury companies create growth today.

It’ll be another kind of catalyst of growth. I think where we are going to see the most benefit from this is through our product crypto as a service. So we are already enabling 250 companies to build crypto offerings for their end customers by building on a white label solution through our products. So we can be a subcustodian. We can provide liquidity through our exchange.

We can help route trades through our prime broker and do that all on a basis for banks, fintechs, other corporates to build on top and offer it to their end customers. And I think Clari will unlock a lot of that potential growth for us.

Unidentified speaker: So 2026, we may hear about new partnerships, new integrations, that kind of thing.

Alicia Haas, President and Co COO, Coinbase: I sure hope so. Yeah. The other thing I wanted to share here is we are absolutely pleased to see the progress with the SEC and the CFTC as well. And so they are not sitting idly and waiting for Congress to act. But what the Clarity Act provides us is then law.

It makes that even the progress that we may see during the SEC right now, it won’t be reversed if we see an administrative change in three years. And so it’s critical that we get through Congress even though we may actually move with more speed through the financial regulators.

Unidentified speaker: I think we were having a conversation with somebody at the FDIC at one point and it was this was post genius. And they’re saying that’s one thing I have to think about. The agencies are going to be writing rules for the next ten years on this stuff. I mean, there is an unlock, but it’s still going to be an evolving thing over the coming years.

Alicia Haas, President and Co COO, Coinbase: But we’re really pleased with the speed that they are also operating with right now.

Unidentified speaker: Fantastic to hear that. And and these partnerships, obviously, I do wanna, touch upon that a bit. You announced the, integration with with Chase, which is super interesting. I heard they’re an okay bank. They’re not they’re not the best.

Alicia Haas, President and Co COO, Coinbase: I kinda wish we had a city announcement to share on the stage. You know?

Unidentified speaker: Tell somebody.

Alicia Haas, President and Co COO, Coinbase: We’re talking about okay.

Unidentified speaker: Tell somebody. We could talk later. Follow-up. Yep. But you you can extend the premise to the partnership with Amex and the new card that’s coming out soon, partnership with Shopify, Stripe, PNC Bank.

How should investors think about Coinbase’s philosophy towards building new partnerships? And how important is this to the broader growth algorithm?

Alicia Haas, President and Co COO, Coinbase: Sure. I hope that when you hear all those names, it just underpins that we are the partner of choice, that we’ve built institutional grade products and services that can serve some of the largest corporates here in The United States and globally. Partnerships are critical to our growth. I think that it unlocks a few things for us. I would put it in three buckets.

One is product innovation. So partnering with Amex gives us the ability to offer a credit card where we can give crypto points back to our users and just creates more utility and value for our users. So product unlocks. Two, there is customer experience benefits. So with Chase, the good example is for mutual customers, it now creates better connectivity between their Chase experience and their Coinbase experience.

Points can be redeemed for crypto. They can use their credit card to buy crypto. Just a more cohesive, better experience for shared users. Third then is access to new customers. Shopify is a good example here where Shopify enabling crypto payments via USDC on base to their merchants unlocks a new channel of growth for us.

So grows potential user base to get the overall crypto ecosystem continuing to expand. So that’s really the theme of many of the partnerships, product innovation, customer experience, new customer growth. And then on top of this, as I mentioned previously, we are really the white label partner of choice for many other customers to build crypto offerings on our platform. And so that’s where we have over two fifty names, which is the PlayPals, the BlackRocks, PMCs here, example. They are using our technology and our infrastructure, whether it’s custody, our exchange, our trading services, to end up offering that to their end customers.

And so all of these, I think, will be big catalysts for growth for us in the future.

Unidentified speaker: You know, it’s interesting when you announced the Amex partnership and the Coinbase One version is it’s a perfect partner because membership has its privileges. Right? And I remember the tag. I’m old enough to remember that tagline. I and and and we get the question from investors.

Is I’m sure it’s a little bit of both, but it seems like it’s diversification play by hope hoping to get more of your your MTUs on a subscription plan.

Alicia Haas, President and Co COO, Coinbase: Mhmm.

Unidentified speaker: But it’s also a membership acquisition or user acquisition play as well. I mean, do do you think of it in that way?

Alicia Haas, President and Co COO, Coinbase: We think of it in both ways. We think of this as attractive customer acquisition for the Coinbase one membership to shift more and more of our revenues to a more repeatable recurring pattern because the card is only available to those who have a Coinbase one membership. So it will create stickiness to that revenue stream and acquisition. But also importantly, it then drives the buying of Bitcoin on our platform. It creates more and more people holding crypto assets in their wallet.

And when you hold crypto assets, you’re more likely to explore new crypto assets. You’re more likely to explore, okay. I own Bitcoin. Maybe I’ll buy Ethereum. Maybe I’ll stake Ethereum, and then we can monetize in multiple different ways.

And so we think that this will just unlock more and more crypto owners.

Unidentified speaker: Certainly, we know this in fintech credit is a great user acquisition tool, but you have to be very careful. Mhmm. Obviously, I mean, do you what can you just think about some of the discuss some of the thoughtfulness you put into building that product and and managing things like

Alicia Haas, President and Co COO, Coinbase: Yeah.

Unidentified speaker: Like credit loss and and fraud and things like that?

Alicia Haas, President and Co COO, Coinbase: I think it’s important here that this is a marketing and distribution partnership that we are not underwriting the credit on our platform. So this will not be a balance sheet risk to us nor a fraud or credit loss.

Unidentified speaker: Okay. That’s that’s super helpful. Thank you. Do want to talk to you a little bit about some of the treasury plays that they certainly gotten a lot of attention this year. How is Coinbase playing a role in this space?

And do you see treasury plays becoming a large part of Coinbase’s institutional business over time?

Alicia Haas, President and Co COO, Coinbase: Yeah. I think that we’re pleased to see the growth of treasury companies. It’s definitely the flavor du jour of 2025 right now. So for those who don’t know, the treasury companies are, for all intents and purposes, securitization vehicles where they are offering investors exposure to underlying crypto assets, but via the form of equity or a preferred or convertible debt. And so they’re raising capital and using that capital to go and buy crypto and then pulling that crypto on their balance sheet.

So in many ways, it’s just another form of investment, just like the ETFs were another form of investment, giving investment exposure to an underlying asset. What we see, and I think the benefit is this is bringing, again, new capital into the space because there are definitely funds out there that do not have the mandate to invest in crypto commodities. They couldn’t invest in ETFs. And so now providing exposure via an equity, via convert, via preferred, it’s bringing in new capital into the space. We benefit because, by and large, again, we are the custodians standing behind those treasury companies.

They are buying the spot on our platform in many cases. They are financing those purchases. And so we are seeing the growth of our custody business, our prime financing and institutional transaction volume via the growth of these these crypto treasury companies.

Unidentified speaker: I do wanna talk about BASE. You know, in previous life, I used to cover the smartphone industry in the early early days. Nice. And we and we used to track too.

Alicia Haas, President and Co COO, Coinbase: Yeah. Can we go back that far?

Unidentified speaker: Have a PalmPilot, actually. I do too. Yeah. It was great for solitaire. Think that was about it.

But we used to track, you know, when there’s multiple operating systems, you know, how many developers are on each. Mhmm. So I I kinda think of base and and some of these other chains that are coming out with some of your competitors and partners a little bit So that recently, we’ve observed a really sharp increase in base transactions and addresses in recent months. I suspect that’s in part because of some of the new partnerships that you’ve signed for sure. But if you could just walk us through what are some of the key behaviors and trends that you’re tracking on base?

And and how should investors think about the potential for increased activity over the next few years?

Alicia Haas, President and Co COO, Coinbase: Alright. We are really excited about Base. Base is the fastest growing layer two solution. And in as we launched it, you’re exactly right. Our sole focus was on attracting great developers to base.

Because as I mentioned, network effects earlier Absolutely. More developers, we can connect them with our client based retail base. We can build applications, and it creates an ecosystem. So we are absolutely focused on developer growth, and we’ve seen breakout developers and breakout apps on base. From there, right now, our main focus is on transactions.

And our goal is to be growing growing number of transactions at the lowest speed, lowest cost possible. And so one of the key announcements we made in q two was our initial goal for base was one second, 1¢ transactions. And we’ve been pleased to move on from one second, 1¢ to milliseconds. I mean, so these are now incredibly fast, incredibly cheap global transactions. And that is driving the cycle of developers then choosing and selecting base to build.

So that is the protocol. That is what you need to look at for the base protocol. But we just also announced, and this is early q three, so we’re not gonna go too deep into it because this put this in a category of our venture product for us, is the base app. So we’ve now built our own application on top of the base protocol. And what the app is doing is it’s combining trading so you can buy and sell crypto.

You can make payments. It also puts social. It’s also integrating third party dApps, and so it’s brought in Zora. It’s brought in Forecaster. These are social apps very much like an X or like a TikTok or an Instagram in the case of Zora.

Online social. And the magic moment and they also have decentralized identity. We have messaging in there. So it’s a full service on chain application. And Brian talked about the magic moment on our earnings call that we’re really seeing, and customers are on the wait list.

This isn’t beta. Like, this is early days. But customers are having this magic moment of posting content. That content becomes point, essentially. It’s a tradable asset like an NFT, and people buy it.

And buying it, they’re not buying it to trade it. They’re just buying it to basically give a tip. So they’re like, I love that content. Like Mhmm. When you have those research reports, Pete.

Like, we can buy your research and, like, all of a sudden, then you see that money go directly to your wallet.

Unidentified speaker: Yes.

Alicia Haas, President and Co COO, Coinbase: And we have users around the world being like, oh my gosh. I earned I earned $500 or I earned $2,000, and I’m I’ve never earned a dollar before for social content. And so this is the magic moment. As we start to think about the base app over time, again, venture, new, I wanna put all those caveats on it, the focus will be on users. And we’ll look at that as monetizing by eyeballs and users and engagement on that platform.

Unidentified speaker: Seems really exciting, and and I’m sure there’s a ton of innovation that you’re seeing on the platform there and some some new ideas and things like that.

Alicia Haas, President and Co COO, Coinbase: What I would say is the speed for engineers to develop on chain with AI is development at a pace that is mind blowing.

Unidentified speaker: I I do need to touch upon AI. We touched upon it a little bit last year, and I completely recognize it’s it is early days. But in my view, it’s not what AI It’s what crypto can do for AI.

Alicia Haas, President and Co COO, Coinbase: Mhmm.

Unidentified speaker: It is a governance tool. We hear about these AI hallucinations and things like that. And, you know, it makes sense that a decentralized a ledger that’s immutable could solve a lot of these issues.

Alicia Haas, President and Co COO, Coinbase: They’re natural companions.

Unidentified speaker: I I’d I’d love to hear, you know, what what are some of your early thoughts on Mhmm. On AI crypto perhaps serving AI?

Alicia Haas, President and Co COO, Coinbase: Yeah. The early experiments right now, we’re investing here in our ventures portfolio. The area that we’re focused on innovating for the Coinbase side of things right now are really through enabling agents to have wallets. Because one of the big frictions with AI is can the AI agents pay. And they cannot pay with a conditional bank account.

They can pay with a wallet. And so creating we have a venture product called x four zero two, which is enabling AI bots to use crypto wallets for our commerce product to facilitate payments on behalf of of users. And so this is where we think the first traction will be. Over time, I agree. It’s the how do we put content on chains with immutable so we can then trace back to sources of origin that we all have trust in, etcetera.

Unidentified speaker: That’s that’s super interesting. Obviously, stablecoins have been a mega hot topic this year, but I don’t I don’t wanna talk about stablecoins. Uh-huh. We already We’ve covered that. I think you covered it.

Alicia Haas, President and Co COO, Coinbase: Okay. Alright.

Unidentified speaker: Wanna talk about the tokenization of everything.

Alicia Haas, President and Co COO, Coinbase: You know, we’ve hit a whole new, like, all time high market cap with the USCC, but let’s talk about it. Sablecoin is still on fire. Okay.

Unidentified speaker: I wanna talk about the tokenization of everything. Yes. I mean I mean Yes. Also exciting. The the the the the next area that is that I think we’re getting calls on all the time is is certainly tokenized equities.

You’re hearing about private equity. Yes. You could tokenize everything. Yes. And and there’s been press reports that indicate that coin Coinbase has been seeking SEC approval to potentially offer tokenized equities.

How is Coinbase thinking about the potential in the tokenized RWI real world assets opportunity? And why might Coinbase be the right the right venue to to really

Alicia Haas, President and Co COO, Coinbase: structure this? Win. Yes. Okay. Is the frontier.

You see a new headline every week with somebody doing something in this space, but nobody has unlocked true equities on chain to behave in the way that we think is beneficial and, like, on chain native. On chain native is on chain dividends, on chain voting and governance, like the ability to hold that in your self hosted wallet trade twenty four seven. That is the vision and the experience that we seek to offer of on chain securities. And that requires working with the SEC, working through new rules to enable this market because the current rules for securities trading are archaic. They were written at a time before we had immutable ledgers, which is all all good.

But this is a very constructive SEC where now we’re working with what does it mean to offer a security on chain in 2025 into the next chapter. So working on the regulatory frontier, working on the product experience, but our ambition is to bring every asset on chain and make it on chain native and unlock the benefits of what an on chain tradable asset means. Less settlement risk, twenty four seven trading, more clarity and transparency, broader distributions to people to be able to trade in their self hosted wallet, to hold their own securities. It’s like going back to, like, the thirties where we hold physical securities on our vault. Now you’ll just hold tokenized versions of those in your wallet.

And why we think that we are suited to win here is a few things. One is we have a two sided marketplace where we have institutions, we have commercial customers, and we have a big retail distribution base. We have deep liquid markets. We are excellent at offering exchanges. We have a spot exchange.

We have derivatives exchanges. We are uniquely enabled here. And then I think the opening and magic will be we believe that we can offer a very differentiated experience through bringing all of these products side by side to be able to be the everything exchange in trading spot, derivatives, futures, options, equities, predictions, all in one place. And being that unified new tech stack experience for that, we think will really be a competitive offering that we will be excited about.

Unidentified speaker: A lot of twenty four seven equities trading. Kind of exhausting. I think it scares everybody in the room.

Alicia Haas, President and Co COO, Coinbase: I can understand that.

Unidentified speaker: The only thing I ask is, please no earnings call at 2AM. That’d be When we both. Yeah. But, no, that that’s certainly a a great a great theme right now that we’re just getting tons of interest in.

Alicia Haas, President and Co COO, Coinbase: I do the AI bots will come

Unidentified speaker: in where they’ll work overnight for everybody. I can use that. That’d be helpful. Thank you. Investment balancing is always a topic where we’re in a fun period right now, which we know is not always the case.

But also, just as you said before, this unlock is really on the product innovation side. So now with the bevy of opportunities that you have before you, you’re scaling derivatives with the integration of Derabit and closing of that deal, hopefully shortly. Close. Close. That’s great to hear.

You’re building a foothold overseas. So there’s the international opportunity there. So you have a lot going on right now. How are you thinking about balancing expense management versus product new product development prioritization there versus profitability? It’s a lot to balance.

Alicia Haas, President and Co COO, Coinbase: It is. So we made a commitment two years ago that we will be EBITDA positive in all market conditions, and we are abiding by that commitment. And so we have not changed our approach quite candidly. We look at every year to be a, can we sustain a crypto downturn and still deliver our financial commitments? And if we do that, what can we invest?

What is the potential expense envelope? And then we divide that expense envelope into core strategic inventures. We always have dollars going to new things. So that is why we’re putting dollars to tokenized securities, why we’re putting dollars to growth of internationals. We are opening up new markets as an example.

But we are very, very keen to keep our eye on how we invest in variable costs such that if we need to reduce them because any change in the revenue opportunities available to us, we can do so in a rapid way. This is an investment year. We have committed to hiring a lot this year because we do see all these opportunities. But like the Darebit opportunity, that’s a highly profitable business that we’re gonna be able to add and continue to then use that to drive even more growth in derivatives. So I think we’re being pretty strategic and prudent in where we’re putting our dollars to

Unidentified speaker: The growth there is amazing.

Alicia Haas, President and Co COO, Coinbase: We have 75% market share in options. It’s a pretty phenomenal deal.

Unidentified speaker: And I think or triple digit growth, I think, last quarter, at least in volume, it’s amazing. I’m very excited to see that fold into the model. I guess last question. You’ve made a number of investments in startups in recent years. I’d just love to hear you characterize where Coinbase Ventures is today maybe versus where it was a couple of years ago.

And are you seeing more venture partners adding new investments there as

Alicia Haas, President and Co COO, Coinbase: well? Yes. So starting in 2018, Emily Choi, who’s our President and Co COO, she brought forth the idea that we really needed to have an investment arm. And it was a brilliant idea and a great contribution by her because it has enabled us to really see what’s going on in the ecosystem, really build a portfolio of customers and build a portfolio of business development partnerships, see where customers are excited, who’ve seen unique growth. And we’ve continued to invest in this space to really just grow this ecosystem.

We knew that we could never be the sole company in this space. The big change between then and now is our check size has gotten bigger to measure it with our own size and balance sheet. The companies in the space are more mature, so there’s more opportunity for follow ons and creating follow on investments, especially when we can do a business development deal along the side. But we continue to be excited to put capital to work here. It’s important for everyone to know that we market we hold this on our balance sheet at cost.

So with the exception of Circle, which then went public, that it’s mark to market, like, the majority of these investments are held at cost. And so that doesn’t reflect the true fair value of what we think this portfolio is, but we think it provides unique opportunities for us. And the areas that we’re focused on today, lot in stablecoin and stablecoin infrastructure, lot in DeFi, lot of new things in application layers, and lastly, the intersection of AI and crypto.

Unidentified speaker: Fantastic. Wow. We hit it on the nose. Perfect timing. Alicia, thank you so much.

Always great to have you. Thank you, Alicia Haas.

Alicia Haas, President and Co COO, Coinbase: Thank you.

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