Coinbase at Oppenheimer Conference: Strategic Growth and Challenges

On Wednesday, 13 August 2025, Coinbase Global Inc (NASDAQ:COIN) presented at the Oppenheimer 28th Annual Technology, Internet & Communications Conference. The discussion, led by CFO Alicia Hess and Oppenheimer analyst Owen Lau, highlighted Coinbase’s strategic priorities amidst a shifting regulatory landscape. While optimism was evident regarding regulatory developments and growth opportunities, challenges remain in maintaining momentum in a competitive market.

Key Takeaways

• Coinbase is optimistic about the regulatory environment, particularly with the Genius Act and MiCA license.
• The company aims to become an "everything exchange," expanding into derivatives and payment services.
• Significant growth in derivatives trading, with $1 trillion in notional volume in Q2.
• Focus on international expansion, particularly in Europe, Argentina, and India.
• Commitment to strong capital allocation, including a $3 billion convert bond offering.

Financial Results

Coinbase reported significant growth in its derivatives trading segment, with $1 trillion in notional volume in Q2, up from $800 billion in Q1. The company achieved an all-time high in open interest, exceeding $1 billion by the end of Q2. However, incentives and rebates for derivatives trading have impacted revenue, being largely booked as transaction expenses.

In terms of capital allocation, Coinbase held $9.3 billion in USD resources and $1.8 billion in crypto investments by the end of Q2. The company completed a $3 billion convert bond offering, with maturity dates in 2029 and 2032, to support both organic and inorganic growth initiatives.

Operational Updates

Coinbase’s regulatory achievements were a focal point, with the Genius Act marking the first crypto law in the US. The company secured a MiCA license in Luxembourg, enhancing regulatory efficiency in Europe. New market launches in Singapore, Brazil, Canada, and Australia are generating revenue beyond direct operating costs. Additionally, Coinbase obtained a license in Argentina and registered with the FIU in India, setting the stage for future expansion.

Product innovation included the launch of the Base app, an all-in-one platform combining social networking, payments, trading, and more. Partnerships with Shopify, JPMorgan Chase, and PNC aim to broaden crypto access and adoption.

Future Outlook

Coinbase’s strategic priorities focus on growing its trading business, particularly in spot and derivatives markets, and developing a comprehensive payments product offering. The company aims to cement its position as a trusted partner in the crypto space, leveraging its ETF position and crypto-as-a-service model. Growth drivers include sustainable market share expansion in derivatives and broader adoption of USDC for payments.

Potential risks include the need for Senate approval of regulatory acts and the uncertainty of product success, with Coinbase willing to discontinue underperforming ventures.

Q&A Highlights

During the Q&A, Hess explained the decision to increase fees on stablecoin pairs to optimize trading revenue, effectively ending arbitrage activities on the platform. The growth in derivatives is attributed to market share gains and new product offerings, such as 24/7 futures for major cryptocurrencies. Regulatory achievements like the Genius Act are seen as pivotal for US crypto regulation, with optimism for the Clarity Act’s passage by year-end.

USDC’s strengths in regulatory compliance and transparency were emphasized, with network effects and distribution partnerships key to its success. The vision to tokenize every asset and integrate them into blockchain systems was reiterated.

For more details, please refer to the full transcript below.

Full transcript - Oppenheimer 28th Annual Technology, Internet & Communications Conference:

Owen Lau, Oppenheimer Analyst, Oppenheimer: Okay. Our next session, it’s with Coinbase. First of all, thank you everyone for joining this session. For those of you who don’t know me, my name is Owen Lau. I cover information services, exchanges, and blockchain at Oppenheimer.

Before we get started, I have a safe harbor statement for Coinbase. I would like to remind you that during today’s call, the company may make forward looking statements. Actual results may vary materially from today’s statements. Information concerning risks, uncertainties, and other facts that could cause these results to differ, it’s included in Coinbase SEC filings. Our discussion today will also include references to certain non GAAP financial measures.

Reconciliations to the most directly 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, the GAAP measures. Alright. So, let’s talk about Coinbase. So Coinbase is well known to be a crypto exchange, but, actually, about 40% of the revenue come from non trading such as stablecoin, interest income, staking, and custody.

Coinbase has also been launching new products such as the base app, perpetual futures, tokenized securities, prediction markets, and payments. The company’s it’s about to close a Durbin deal, which will further expand the product offering internationally. And today, we are excited to have CFO Alicia Hess to talk about Audi. So thank you very much for your time, Alicia.

Alicia Hess, CFO, Coinbase: Thank you, Owen. Delighted to be here.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Great. So to kick things off, lots of things happening across the crypto space within Coinbase as well, and you reported earnings around two weeks ago. There’s a steady drumbeat of regulatory and product new flow. Can we maybe start by just having you outline what’s top of mind for you today? Can you frame your priorities for investor here who may be less familiar with your story?

Alicia Hess, CFO, Coinbase: Absolutely. And I just think it’s so interesting to look back at what a difference it has been over the last year since I was with you last in this forum. So the biggest change has been that we are now sitting in the most pro crypto congress and president White House administration that we’ve ever had. And this has led to great strides towards regulatory clarity, including recently enacted stablecoin legislation, which was the Genius Act. So with this regulatory backdrop, our focus is on building.

And as Brian shared in our most recent earnings call, we’re really focused on driving growth in our core businesses. So first, we’re growth in trading. As Owen said, about 40% of our revenue comes from subscription services and about 60% in the last recent quarter with our trading businesses. So we’ve long believed that every asset class will move on chain, I e, will become a tokenized asset, and we believe the time is now. Now we’re at this point where our customers are asking for this.

The regulatory environment is ready to have these talks about what does it mean to bring assets on chain, and the technology is ready. We have now seen scaling in the technology that we can do fast, cheap, global transactions. So the time is now. So our long term vision has always been to build the everything exchange where people can trade all different types of assets in one place on crypto rails. We started this journey with spot trading, crypto commodity spot trading.

We started to be the simplest place to buy Bitcoin. As of q two, we offered over 300 assets for spot trading. Just last week, we began to expand access now to millions of crypto assets so you can come on the Coinbase main app and get access to the entire universe of crypto spot trading. And we did this by integrating DEX trading into the Coinbase app. In the last year, we started to build beyond spot trading where we now offer a growing suite of derivatives products, and we can talk more about those.

And in the coming quarters, our goal is to broaden out that asset class to more asset types available on Coinbase. So crypto spot, we now have derivatives, and then we’ll move on and on. Beyond trading then, our goals are to grow a payment stack. So we see payments as the next big use case in crypto and see opportunities ahead since stablecoin payments are faster, cheaper, and global. The last focused area of ours is to be a trusted partner of the ecosystem.

So we are leveraging our deep experience in building crypto infrastructure to power the next wave of businesses. Over 240 businesses are using crypto as a service capabilities to power their own crypto needs. So we’d announced in the quarter companies like PNC. Previously, we talked about BlackRock, Stripe, PayPal, and more are building on our infrastructure layers to offer their own crypto services to their clients. I think it’s important to note here that many of these initiatives, like payments, bringing more assets on chain, these are net new.

These could take us many quarters, but this is the vision that we’re working hard to realize and the potential that we see.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Got it. And then I do wanna talk about the dynamics between trading volume and revenue. I got some questions about that. Maybe there’s some confusion. I think Coinbase raised fees for some stablecoin pairs earlier this year.

It looks like it impacted your trading volume since then. Could you please talk about the decision for that move and the trade off? I think more importantly, the trade off between volume and revenue so that investors understand your decision.

Alicia Hess, CFO, Coinbase: Absolutely. So previously, prior in q one, for example, we had very low or no fees at all on stable pair trades. And as a result, what we saw was some traders were bringing large amounts of Tether to our platform, converting it to USDC, and then converting it to Fiat. So, effectively, we were becoming the off ramp back into Fiat for Tether. They were using our infrastructure for free and taking advantage of this arbitrage opportunity.

So ultimately, we decided to optimize here for trading revenue over volume, and that led us to increase fees on these large volume stablecoin pair trades. And it effectively ended that arbitrage activity on the Coinbase platform. So it’s a very specific problem that we were seeing that we added these fees for to create some friction in that trading pattern.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Got it. And then maybe move on to derivative volume, for both US and also internationally for Coinbase. I think the number was pretty strong in the second quarter even though the spot volume came down. Could you please talk about the driver of that strength in derivatives?

Alicia Hess, CFO, Coinbase: Absolutely. So as I mentioned in my opening comments, derivatives have been a key focus area for us, and we’ve been investing a lot over the last year to grow our market share in this space. So in addition to just growing share, because this is 75% of global trading volume, and so it is a well established market outside The US, we’ve also been a pioneer for new products here in The United States. For example, we became the first US regulated futures exchange to offer twenty four seven futures for Bitcoin, Ethereum, Solana, and XRP, and we launched a perpetual style future contract to US retail customers, the first of its kind. And globally, perpetual futures are what dominates global crypto derivatives trading.

As far as the second quarter, you’re right. We saw a nice performance in q two. We saw a trillion dollars of total notional volume trade in, which was up from 800,000,000,000 in q one. So it was growth quarter over quarter where we did see a decline in spot volumes. And we also reached an all time high in open interest, which over a billion dollars as of the ’2.

So our focus is on growth right now. We are providing incentives for select customers. This is important to get attract sustainable capital to the platform and to really build into that global share. And that we’re also expanding the product. We’re offering more contracts, more collateral types, and this is going to be the focus of us over the next period of time.

I think it’s really important to note that we are paying incentive and rebates for a lot of the derivatives platform, and they offset revenue but are largely also booked to our transaction expenses. And as a result, we don’t see material revenue from derivatives yet, but we’re really pleased to see the market share growth and think that over time, this can be a much larger part of our financial picture.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Got it. I wanna echo what you just said, Alicia, because I remember over the last few years, we keep talking about regulations and policy. It’s not like we don’t care right now. We will dive into these questions, but at least we can talk more about product launches. So let’s talk about regulation, and policy.

So, president Trump just signed a genius act into law last month. I think it’s a long overdue clarity that the industry is asking for. And the next one, it’s the Clarity Act, right, which passed the house during the crypto week. I think it’s more important for Coinbase and the whole industry for this act. What do you think about the timeline of it getting passed in the senate and get into law?

Alicia Hess, CFO, Coinbase: Absolutely. So just to touch on Genius briefly, it was a monumental achievement. It’s the first crypto law in The United States being passed into law, and we’re really excited because we saw major bipartisan support for this bill. And it’s a first step on the road to make The US the crypto capital of the world. But as you know, the job isn’t finished, and we’re really excited for the progress that we’re seeing with clarity.

So the senate now needs to work through their own process. We expect the two committees, banking and agriculture, to mark up these bills in September, and we hear that chairman Scott wants to go to the floor in October. So this is where this is outside of our control. It’s difficult to predict certainty about when it comes to floor time, but we do see the president seeking this moving forward quickly. He has asked for this to come to the floor for a vote.

He has asked this to come to his desk for a bill. So we remain optimistic that we’ll see clarity pass into law by the end of the year, but the timing is uncertain at this time.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Got it. Got it. Okay. And then, another question about regular regular clarity. It’s it looks like it is also emerging outside The US as well.

Could you please give us an update on, your international expansion because of that? Like, you listed I think you listed international expansion as one of your key priorities this year. How is that going? Any notable milestone that we should be, we should be aware of?

Alicia Hess, CFO, Coinbase: So we remain very focused on international expansion as a strategic priority, and we’re making good progress. So in the spirit of regulatory clarity, you’re right. Much of our focus this year had been to secure our MICA license, which we’re pleased to announce that we have secured a MICA license in Luxembourg, and this provides the foundation to build in a regulatory window in Europe. This will provide efficiency as we no longer need to get country by country registration. Previously, we had to go secure vast licenses, virtual asset service provider licenses in each of the EU markets.

Now post MICA, we can then market, we can grow our products with one regulatory regime. So, really, this has been a large focus of us at this time, laying the foundations, complying with the new regulations, getting prepared for 2026 when this goes into effect. Similarly, we’ve been planting seeds for the next cohort of countries. We’ve really built a successful playbook now for international expansion. So for example, the 2023 market launches where we went into Singapore, Brazil, Canada, Australia, we now see each of those countries generating revenue in excess of their direct operating costs.

So we’re starting to plant the seeds for the 2025 cohort, and the first step is then securing the requisite licenses in those markets. So we’re pleased to have secured a license in Argentina, and we’re now busy focusing on the next step, which is securing bank partnerships, building localized product. And similarly, we registered with FIU in India and are making good progress there. But don’t expect these to be material contributions to our revenue for a few years.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Got it. And then another hot topic is stablecoin. It seems to be the biggest near term beneficiaries from the regulatory clarity we are seeing, like, emerging in The US and also overseas. I mean, we know Coinbase has a deep relationship with Circle. How should we think about the opportunity and potential for stablecoin market cap growth that’s been unlocked following, Genius and Maker?

Alicia Hess, CFO, Coinbase: So we’re really pleased that USDC is going to be a compliant recognized payment stablecoin under Genius and was the first stablecoin and the largest stablecoin to be MICA compliant as well. So this gives it an opportunity in each of those markets, as you said. So first, we just applaud lawmakers for outlining clear frameworks. This will bring transparency, safety, clarity to this rapidly growing market. And this is what many participants have been waiting for.

They are waiting for comfort that these are payment stablecoins, are assets that they can transact with, that they can use for commerce. It is hard to proceed with growth in commerce when you’re dealing with an intangible asset, which is what stablecoins and crypto have largely been classified of up until this point. So the opportunity is now here. And what we’ve seen, though, is significant market cap growth over 250,000,000,000 despite the lack of clarity. And so now with this in place, we anticipate seeing broader adoption for use cases like payments, collateral, and settlement in the broader financial ecosystem, and we’re excited to support that growth.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Got it. And then, like, another narrative coming up because of that, the conversation is, in fact, many well known companies are expressing interest in this space and creating their own stable coin and etcetera and things like that. What do you think why can or how does USDC can win in this space versus, like, many other alternatives out there?

Alicia Hess, CFO, Coinbase: I think you’ve seen this commonly over time with new technology as you first see fragmentation and then you see consolidation. And I think that USDC was built for this moment of regulatory clarity. It stands apart today as the only scaled, broadly adopted US dollar stablecoin that operates at the highest standards for regulatory compliance, reserve management, and transparency. You’ve seen that it’s been embedded in many DeFi protocols. It is widely used by global market makers to enable their trading strategies at various exchanges.

And what I think is important here are that network effects are important. The first use case for stablecoins were within the crypto markets as the stablecoin matched the twenty four seven markets that crypto trades in. That was the use case. Now we can move on to new use cases, payments, collateral, etcetera. And I think that what we will need to see here is the network effects, the distribution partners.

And I think what many US entrants underestimate is the compliance lift, the interoperability requirements, and the distribution that’s needed to get to stablecoins at scale. So USDC is supported natively across 24 blockchains and growing. It is the stablecoin of choice for on chain activity, notably DeFi, and it is one of the primary stablecoins embedded in crypto trading flows, and so we are excited that it can make its next tentacle into the payment space.

Owen Lau, Oppenheimer Analyst, Oppenheimer: And then, going back to your partnership, maybe related to payment space, you signed a partnership, like, recently with both JPMorgan Chase and PNC, very large banks in The US. Do you expect to sign more similar deals with other banks going forward? How should we think about that?

Alicia Hess, CFO, Coinbase: I think this speaks to our platform being the trusted partner. We have more than a decade of experience building these tools. We have more than a decade of experience in safely storing bare instruments. We’ve invested in custody, in trading and financing, stablecoins, base as a protocol, staking, and more. So we have the underlying infrastructure.

We have a full stack infrastructure. And as a result and the investments that we’ve made in compliance and security, we’ve been selected by more than 240 institutions that utilize our Coinbase infrastructure in some way today. Think of this as an a la carte menu of use. You could come to us to sub custody. You can trade on our platform on our deeply liquid exchange.

We can be a staking sub provider for you. We can do these products and augment many other financial institutions as they wanna create crypto products and services for their customers. And I think this is so important because customers are asking for access to crypto. You can see that in other companies’ decisions to then partner with us. And so the partnerships that we’ve announced, JPMorgan, PNC that you cited, they’re just great examples of providing more access to more people to enable them to trade, to secure, to hold crypto.

So that is our goal. These are one step to just continue to build bridges to more and more people, build out the market, build out the product offerings because we believe over time, you’ll see just the transition of transactions moving on chain, and we look to be an important part of that.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Yeah. I like that one just one step to build the bridges and more more to come. More to come. Then another another announcement was related to with, Shopify, another great relationship, another large merchants out there. It’s Coinbase actively signing merchant partners to drive USDC adoption.

Would you partner with a merchant acquirer, like, do it, or Condeys would do it on its own?

Alicia Hess, CFO, Coinbase: So thematically, it’s the same answer that I just said with regards to JPMorgan and PNC. This ladders up to then us being a trusted partner for the next wave of businesses getting into crypto. So whether companies are getting into crypto because they wanna enable their customers to trade or they want their customers to enable payments on crypto rails, we are a platform of choice. And this is an opportunity just like we’re signing up new partnerships on the trading and custody side. We are looking to actively sign up partners on the payment side, and Shopify is a great example of that.

This is a major milestone because it will enable a million merchants in their network to accept USDC payments. And we are partnering with them for merchant distribution here. We collaborated with them on a novel on chain commerce payment protocol that Shopify offers that will enable their merchants to use USDC directly. So we’re leveraging their existing distribution. This will be rolled out later this year.

It is very early, early days, Owen. And I I wanna just comment here that no single partnership is going to be a material growth driver, but I think what we need to focus here is that we are the platform of choice, and each of these partnerships that we made will embed crypto more deeply in the overall ecosystem for trading, for payments, for global use cases. And that growth of the overall market is what will drive Coinbase revenue growth over time.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Got it. That’s super helpful. Another hot topic is tokenization. I’m pretty sure you are being asked this question a million times already, but it looks like Coinbase is interested to get into this. Could you please talk about Coinbase ambition in tokenization?

Which asset classes do you want to tokenize, and how will Coinbase approach this?

Alicia Hess, CFO, Coinbase: It has always been our vision that we will tokenize every asset possible and bring assets on chain. I think many of those who might be listening know that Coinbase tried very hard when we went public in 2021 to go public via token, and the it wasn’t ready yet. The infrastructure market structure was not there. This is what door is opening now. We start to see regulatory clarity emerging such that we can bring more asset types on chain.

So as I said in my opening, we now think consumers, we think technology, we think the regulatory environment are all ready for this evolution. So tokenization will be the bridge that connects the global financial system and capital with blockchain rails. And we believe we have a number of strengths that we will be able to bring these products to market. So we have globally compliant distribution across retail institutions. We have experience building trusted infrastructure, and we have a track record of innovation in markets both on and off chain.

So we are building on the frontier here, and this is important. This is gonna be a multi quarter journey because we are building this frontier where both technology needs to progress and the regulatory market structure environment needs to progress. But we envision a role for tokenization of wrapped assets, real world assets, some people might call them, but that could be anything from real estate funds to other types of assets. We think that assets will also be natively issued on chain going forward. I envision a future.

We just did a convert offering last week. Why couldn’t that convert have been an on chain asset? New assets, new tranches of single class equities. And we look forward to bringing the best of innovation that’s already occurred on chain to traditional asset classes. So we don’t have the details ready to share it yet, but we are innovating, we are building, we are exploring and experimenting here.

But think about a world where it’s all on chain. Voting on chain, governance on chain, dividends on chain, that is a vision of the world that we see us moving to over time. It will take work. This is not an a short term vision, but bringing all of these assets on chain in a tokenized way to enable twenty four seven global markets is a vision that we have.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Got it. So I know you’re still in the early process. You don’t wanna talk about, like, the detail too much at this point. But, I mean, from a, like, from a philosophical standpoint, it looks like offering tokenized equities and bonds to non US investors twenty four seven has a stronger value proposition. Like, what do you think about, offering this to US investors?

I mean, it’s already very crowded space, convenient to trade US equities, right, within existing ecosystem. What’s the thought process for the management team?

Alicia Hess, CFO, Coinbase: It’s a great question. So first, make no mistake. Our ambition is for these products to grow global, as you said. And I do agree. There is more friction globally, and there’s less friction in The US.

We believe that tokenized securities offer a number of benefits to the global customer. One, international capital, so TAM expansion for US listed equities. There’s important liquidity and risk management opportunities here, instant settlement, twenty four hour trading. The instant settlement can really reduce settlement risk in the system. There’s also increased functionality, decentralized finance for traditional securities, for example.

So in The US specifically, the benefits to risk management can be an unlock. And then when I look at the opportunity, you would I think that you’re right. Many people, oh, and could say, well, gosh. There’s no friction in The US. This is a problem solved.

This isn’t needed. But we were first to market twenty four seven futures and perpetuals to The US for Bitcoin and Ethereum. And I think this early example here illustrates the opportunity for traders in The US because our weekend volumes have been stronger than expected, and it’s predominantly driven by retail trading. And we have seen in the early days, some weekends meet or exceed our weekly daily trading volumes. So these are things that we think can be unlocked.

And I think people also were somewhat perplexed that stablecoins would see the adoption that they saw as well. People thought US Dollars were broadly available. There was no need for a $24.07 dollar, and we’ve seen the growth of that as well. So sometimes with skepticism, there’s still a huge opportunity, and I think that we are going for that opportunity. Again, early days early days, but this is the direction of travel.

Owen Lau, Oppenheimer Analyst, Oppenheimer: I like that. I like that early days, and, you know, there’s still some skepticism which present opportunity. Another topic, which is actually my recent favorite topic, it’s the base app, like so called the super app. That’s my term, not your term. You announced that base app, the base app last month.

I listened to the call. Could you please talk about Coinbase vision of this super app?

Alicia Hess, CFO, Coinbase: Are you off the wait list yet, Owen? Do you have the Base app?

Owen Lau, Oppenheimer Analyst, Oppenheimer: I I am not off the wait list, but I registered. I am still on the wait list.

Alicia Hess, CFO, Coinbase: You’re on the wait list. Alright. Soon. I am also very excited about the Base app. So what is the Base app?

So I think it’s important to start with. We have the Base protocol on the chain, and we’ve talked a lot about this with investors that we are building a layer two solution to offer faster, cheaper transactions. And our goal was to have developers build applications on top of Base. Well, now what we’ve done is we built an application on top of Base, which is the Base app. And so the Base app is an everything app, and it brings together a social network.

It brings together payments, trading, messaging, decentralized identity, and also app discovery. It’s a place where you can gain access to other on chain apps. You can get access to an AI bot that helps you with your crypto investment decisions. You can play games. There’s an on chain social.

There’s on chain messaging. It puts it all in one place. And what Brian shared on our earnings call was the magic moment that a lot of people experience and he experienced is you make your posts on Forecaster within the base app, and then people can coin those and buy those, and you can gain instant proceeds from the content that you provide. Those proceeds go directly into your wallet and then can be used to buy crypto, to make payments, to invest, to save. This is now global.

And as we roll this out for people, they are going to have this experience about the Everything app to really deeply engage in the crypto ecosystem. You own your own content. You can earn money for posting, not just likes, and you get paid as people engage with you. So we’re really excited, but, again, early, early days, early days, people will get off the wait list in the coming months, and we then will share updates in future earnings calls.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Looking forward to it. I’m looking forward to it, Alicia. And then maybe let’s turn our focus to capital allocation. Coinbase has a very strong balance sheet. I think you have around 10,000,000,000 around rough 10 rough rough number, $10,000,000,000 of USD resources.

How should investors think about your capital allocation strategy? I mean, given your share price, would you mainly focus allocating capital to organic growth and m and a?

Alicia Hess, CFO, Coinbase: We do have a strong balance sheet. So you’re right. In q two, we had 9,300,000,000.0 of USD resources, and now we had a billion 8 of crypto investments. But importantly, since earnings, we completed a $3,000,000,000 convert bond offering. Half is due in 2029, and half is due in 2032.

So we do have a strong and an even stronger balance sheet since our q two earnings. But it’s important to note that we have a fair number of capital commitments. So we have working capital that includes the regulatory capital requirements for our various legal entities around the world. We self insure, and so we have a bucket of risk capital to protect our balance sheet against risks and unknown unknowns. And then we also invest.

So we have a prime financing book that we are lending money to institutional clients on a fully secured basis. As we shared on our q two call, we saw all time highs for the average loan balance was over a billion dollars in the second quarter, and we see increasing demand for that. So beyond these uses, though, we also see the opportunity to grow the business, both organically and inorganically. Because we’re committed to generate a positive adjusted EBITDA in all operating environments, we believe our revenue will cover the majority of our organic costs. And so we do think our balance sheet can help drive inorganic or acquisitions for us.

So this will become a big focus of our capital allocation. However, that will be all opportunistic. I don’t have anything to announce today.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Got it. Okay. Looking forward to it as well. So but to we have covered a number of different, product, today, many of which are new. As we run through the rest of 2025 and going into 2026, right, we talk about payments, tokenization, and derivatives.

Which of these opportunities has you the most excited about? Which one do you think could become a more material contributor to the business the soonest?

Alicia Hess, CFO, Coinbase: We don’t pick our favorite children at Coinbase. So it goes back to the three priorities I outlined at the beginning. First, growing our trading business. This means spot derivatives and the long term vision of becoming the everything exchange in The US and globally. Second, our full stack payments product offering as we think payments is quickly emerging as the next big use case in crypto, and we’re thrilled to be at the forefront and driving innovation here.

And lastly, just continuing to cement Coinbase as the trusted partner. From our ETF position to crypto as a service and the recent strategic partnership announcements, we believe that we can leverage our platform and help grow overall crypto adoption and become cemented as a key infrastructure provider. So our plate is quite full. I think it’s important to note that we’ve always been a company that prioritizes product innovation. We make venture bets.

We push forward. Not all of these products will succeed, and we are okay to make bets and try things and then quickly make decisions to shut them down if we don’t see growth. So we are investing in a broad portfolio to continue to grow the diversity of our revenues, the stability of our revenues as we move away from speculative trading as one of the primary use cases in crypto. And we’re really excited to watch these products grow over time even if it will take a few quarters to have the full potential of them in our p and l.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Got it. I think we are about time. Again, thank you, Alicia, for your time. Always good to see you, by the way. It’s just always good to see you.

And thank you all for joining us today as well.

Alicia Hess, CFO, Coinbase: Thanks, Owen, for having me.

Owen Lau, Oppenheimer Analyst, Oppenheimer: Thank you. Alright. Have a good day. Bye bye.

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