Coinbase Posts Prediction Market Trading Boost As Crypto Cools In Q3
Coinbase CBO Shan Aggarwal on how prediction markets are complimenting the overall business
By Zack Guzman
October 29, 2026
Coinbase's third-quarter revenues came in slightly below analysts expectations on Thursday, but growing prediction market traction spotlighted an increasingly diversified picture for the exchange.
Coinbase posted net revenues of $1.16 billion, down 34% from $1.76 billion a year ago, as subdued crypto volatility and lighter trading activity pressured the core business. Analysts were expecting a top-line number at $1.21 billion.
But in an interview with Coinage following the earnings report, Coinbase Chief Business Officer Shan Aggarwal argued that the company's newer businesses are beginning to demonstrate why its long-term growth may not depend as heavily on cryptocurrency trading cycles.
"I think the big thing for me is that our diversification efforts are really starting to show up in the results," Aggarwal explained. "Derivatives and prediction markets in particular, those now comprise over 25% of our transaction revenue. And just a few years ago, that was at 0%."
The shift comes as Coinbase recorded its fourth consecutive quarter of crypto trading volume market share gains, doubling its share over the past year to 10.7%. Shares slid 3.5% lower in after-hours trading.
Read More from Coinage:
Aggarwal said the expanding mix of products is helping Coinbase become "an all weather business" that is less exposed to swings in spot cryptocurrency trading.
The company also reported $570 million in subscription and services revenue, up 3% from the previous quarter and representing nearly half of net revenue.
The results highlight an increasingly important distinction for investors evaluating Coinbase: Its core trading operations remain highly sensitive to crypto market conditions, but newer revenue streams are beginning to provide an offset.
Still, the company expects adjusted expenses to rise in the fourth quarter to between $1.07 billion and $1.157 billion, partly reflecting greater investment in prediction markets. That spending underscores the financial balancing act facing Coinbase as it attempts to establish new businesses while optimizing for upside during weaker periods for crypto.
According to Aggarwal, Coinbase is finding that customers who participate in prediction markets subsequently increase their activity in traditional crypto trading.
"We think we're really just scratching the surface," Aggarwal told Coinage. "The people who trade prediction markets, they actually go on to drive incremental crypto spot trading volume."
That relationship could prove particularly valuable as Coinbase competes with Robinhood and specialized prediction-market platforms for customer engagement.
Unlike platforms where sports-related contracts account for the overwhelming majority of trading activity, Coinbase said more than half of its prediction-market contracts traded during the quarter were in non-sports categories, including crypto-related events and elections.
Aggarwal attributed that difference to Coinbase's existing customer base, which tends to have a stronger interest in cryptocurrency markets.
Asked whether Coinbase has a specific prediction-market share target, Aggarwal declined to provide one.
"We're really just focused on scaling the business right now and then optimizing the economics," he said.
Beyond prediction markets, Coinbase is counting on derivatives and tokenization to help transform its trading platform into what CEO Brian Armstrong has described as the "Everything Exchange."
The company's derivatives trading volume has grown 179% over the past two years, supported in part by its acquisition of crypto options exchange Deribit.
Aggarwal said the next major step is integrating liquidity across options, futures and perpetual futures into a unified trading platform serving U.S. and international customers.
"Historically, you've seen these bifurcated pools of liquidity, with the US being restricted to only U.S. users and everything else being offshore," Aggarwal said. "We're bringing that all together on one platform."
He argued the approach could improve pricing and capital efficiency by allowing customers to cross-margin positions across different products. Coinbase is also reporting accelerating activity in tokenized equities issued on Base, its Ethereum layer-2 blockchain.
Although the company's earnings presentation highlighted more than $1 billion in cumulative trading volume for Coinbase-issued tokenized stocks as of the end of September, Aggarwal revealed that the figure has already tripled.
"As of the end of Q3, we had seen over $1 billion in trading volume on Coinbase issued, tokenized stocks," he said. "Since then, we've actually already crossed $3 billion in trading volume."
The milestone suggests tokenization is emerging as another potential source of activity for Coinbase, though trading volume does not necessarily translate directly into equivalent revenue growth.
Aggarwal argued that the bigger opportunity goes beyond simply creating blockchain-based versions of traditional securities.
"Issuance is just the start. But the real hard part is how you create real use cases and utility for the assets once they're issued," he said.
That could eventually allow investors to use tokenized stocks as collateral, lend them into decentralized finance markets or access financial products outside traditional trading hours.
Subscribe to the free Coinage newsletter to stay up-to-date on all things crypto and finance.
