Coinbase's third-quarter net income rose 66% from a year earlier, the company reported, as its prediction markets and derivatives businesses drew more activity even as spot trading stayed soft. Bernstein analysts credited those newer lines of business with helping to offset the weaker spot volumes.
Where the growth came from
Spot trading — long the core of Coinbase's revenue — was the drag. The company's prediction markets business is gaining traction, and its derivatives offerings are expanding, according to Bernstein's assessment. Those two areas helped fill the gap left by lighter spot activity.
The 66% jump in net income is a year-over-year comparison. Coinbase didn't break out the contribution of prediction markets or derivatives in the figures cited by Bernstein, so the exact split between the two remains unclear from the outside.
Prediction markets get a closer look
Prediction markets, where users trade on the outcome of events, have moved from a niche product into a more visible part of Coinbase's lineup. The business is gaining traction, Bernstein noted, without quantifying how much revenue it added in the quarter.
For Coinbase, the appeal is diversification. When spot trading cools, as it did in the third quarter, revenue from other products can soften the blow. Derivatives offer a similar cushion, giving traders ways to hedge or speculate that don't depend on buying and selling the underlying asset outright.
Spot trading stays weak
The weaker spot trading activity isn't unique to Coinbase in the sense that it reflects broader market conditions, but the facts here stop at Coinbase's own results. What Bernstein makes clear is that the company's newer businesses are doing enough work to keep net income rising even while spot volumes lag.
That's the tension in the quarter: a headline net income gain of 66%, built on businesses that are still small relative to spot trading but growing fast enough to matter.
What to watch
The next data point is how Coinbase reports the breakdown in its upcoming filings — whether prediction markets and derivatives get their own line items or stay folded into broader categories. Until then, the 66% net income gain stands as the clearest signal that the company's push beyond spot trading is starting to show up in the numbers.
