Coinbase Global (COIN) 15 Feb 242023 Q4 Earnings call transcript

Good afternoon. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the Coinbase Fourth Quarter and Full Year 2023 Earnings Call. [Operator Instructions] Anil Gupta, Vice President, Investor Relations, you may begin your conference.

Good afternoon, and welcome to the Coinbase Fourth Quarter and Full Year 2023 Earnings Call.

call and Armstrong, and COO; Chief Officer. today's Emilie and Paul on Legal President Choi, Alesia me are Co-Founder Brian CEO; Grewal, Joining Haas, CFO; shareholder had Relations Investor earlier today. to I on website the you've was published all read hope our letter, which our opportunity

cause Before started, concerning factors materially vary from to statements. Information I'd results remind today's other that during these may we we Actual may is could our results uncertainties differ get risks, that and filings. call, SEC make like included you forward-looking to statements. today's in

to Our most non-GAAP addition to, discussion should today measures shareholder will also a GAAP Relations as comparable not our metrics. include are the measures for references website. to on considered in GAAP financial measures. the certain letter be Reconciliations in financial substitute provided financial directly Investor Non-GAAP

technologies using our once safe to are to We questions. ask enable again shareholders

our that, comments. over In questions take some will live from Brian with research to addition, analysts. And it turn for we I'll opening

Anil. to will it in X with that $XXX Thanks, and itself that contrast, help new in has popular U.S. laws XXXX, EBITDA product trading income Coinbase trade. the of Many on XXXX, choice. class say is ship the phases, to now that XXXX volume. what in those. driver trading major always in net have to which the report launched trading we positive spot globally. of And XXXX, compliant want in derivatives to on strategy of I In the This as to when a managed happy leader derivatives has revenue customers. XX% always the in XXXX, but the By cut in in in faster way, seen costs adoption building wasn't is regulated big positive want to do get crypto to broke established touch I'm Coinbase trusted we people that asset by and it a Financial a majority even became corners fast, It Phase to and of in been for has longer U.S. competitors Markets, played non-U.S. long-term crypto lean leader took to cut said total X, a and in trading manner drive crypto and of taken the that $XX did compliant which and year-over-year team. Coinbase Crypto Exchange, happen But each QX, we for a industry, led our we've In in billion. million proud crypto. I've launched Coinbase out. futures launched how adjusted now derivatives revenue offers $X.X us million the we I'm trading to in Coinbase QX, trading International offers approach focusing we trading

the Prime. Canada, in with Management. our We And improved also institutions. in XXXX, products by launched capital of our in and received France, also world's the we we institutional products XXXX, Asset We registrations new product. held financing Singapore Spain. In licenses. trading Coinbase Coinbase launched is meaningfully We our or licenses trading expanded or Bermuda, getting around operations Most Brazil, world institutional grew

custodian U.S., on commodity custody, earning in now We pools unlock financing. Coinbase in as but already playing a silver. the seen with crypto the not capital played will to selected demand trading into also revenue the ETF second key new on role surpassing of Coinbase great Bitcoin just is here. in as the was even and key We've We're Bitcoin ETF largest This a space the of of XX. approval role flow X the as

Phase X, these of will improvements asset grow class. to as new continue All crypto a

to in largest asset August, send new a in a And blockchains instant ability this payments just is billion. Coin, we in Circle arrangement to USD not new first-class is a the of Payments. process utility the global the Base. which be XXXX, Global to over also class, now expand an into with used market the launched services. Coinbase powering integrating free Coin of our the entered $XX help stablecoins products We on it's is now experience. launched of in second, make And with into cap and payments to began financial second The dozen USD We're using on stablecoin

a form third with Internet. of and In big with final platform Internet or the The native money start new built also the a phase, has time, the phase for and become payments Internet crypto or companies. in. be Over value application also more centralized will believe we didn't more

even of dial-up the down redecentralizing costs we media, and trying from So was to own cards confirmation like that bolted an microtransactions our layer launched with credit or social help a for going we In in And issues fraud, to accelerate on limited set messaging, ability X send solution protocols new broadband. ways. number scale as to times X rise similar got transaction voting. billion business to ad-based do chargebacks, more will of the to associated Internet users, trend Coinbase blockchain Base. identity, the XXXX, the content, governance afterthought. and help called models. Crypto this of fees, is to cross-border commerce -- of led bringing Internet and a This money, or number

in Coinbase We improvements also launched Wallet.

instance, it For easier decentralized find and made applications DApps. to we or use

decentralized and applications with app. already of the Coinbase sign-up a an the app or attempting connected. protocols for There's the each crypto For all compelling It's card details and captured DApp is no and hearts into can with you're signed can it your having wallet in to application like a credit to type who experience, now instance, each days process bring look what do early one into tap, but your for few is toys, Wallet. Coinbase the one open many we're early together customer of imagination developers, in platform has of you companies have still which you as and

we see crypto So that's how evolving.

First, Whether in new in as being are PAC a as this. continuing in remain to or million bills the progress. In was and me this But upcoming new services; of with In upcoming through elections. and case either it's goal have the U.S. an to is way get priority, leading I candidates want majority now as financial up ultimately our or and $XX already give in to asset Americans you confident we're And The great regulatory get week. second, They're with there growing XX% a get a XXXX, come procrypto the this the a with space, to stand at U.S. crypto right. election. top to want through comes Congress get U.S., new and also courts Congress Coinbase, to clarity about movement players In platform. create quick it to election. the our will in to clarity business. Anecdotally, of charge bipartisan on most, I XX grow really elect used we support. this to for U.S. crypto new application U.S. new legislation a the help working said even regulatory going countries strong crypto creating in for crypto other the along thank voting goal court the drafted. legislation third the law, customers is class; contributed XXX,XXX voters of GXX in today members from update passed the a with we're super designed X there. And advocates crypto.org, U.S., who the our XXXX million We something Their that stand now the clarity million meantime, X passing grassroots set for system still who've crypto this it's the every

Looking for top year to a I'd like for of the in priorities ahead a to closing. share our XXXX few moment,

streams, expansion, of crypto. revenue, and drive some this and utility the growing largest growing fees it economy. integrating will and our deeply By allows fund crypto trading priorities be the derivatives our to us revenue continuing growth, other stablecoins. spot aspects especially Coin priority first drive do and into X international of Our USD to with We'll revenue more trading to

world for instantly priority much experimenting free now with to be year, inflation is be the potential in Base. the reducing customers anywhere USD as keep payments stablecoins going global especially on in payments supporting -- to crypto. developers second USD to This we'll We're also use make Our This We'll building fees. keep starting lower in markets, has on and friction, send Base. Coin can case. those driving adoption a utility of with high emerging see to

of decentralized surge the easy and we've moment hoping average become have that using Crypto majority the building recently, in many to our decentralized be to activity protocol, are self-custodial social we're its Base. We'll media can Coinbase Farcaster early just iPhone these we identity investing make needs messaging instance, happen. For for on still help the seen developers a on or where like shape. are starting applications utility are Wallet, what of now take to also person, Farcaster, decentralized protocols social, where of app, use called Frames and the

and activate in advocates and to its for in with clarity legislation crypto million drive regulatory upcoming the Crypto.org for engage new election the crypto We're to Congress continue U.S. we'll to with work we'll continue industry. this Lastly, supporting to Stand goal X towards

financial we'll landscape, to well law I'll competitive over passed. I'm our long-term with growth. that, it the in With and for to hand position, the Alesia. I very think case sensible fight to pleased efficiency we're operating Finally, incredibly get the continue positioned and room court

operational Thanks, good on discipline XXXX, everyone. financial and we focused Brian, In afternoon, and excellence.

in we share year result, were a want X stronger than I As position today we're ago. some to a highlights. much

to subscription a through from revenue highlights our sheet. balance expenses, and a growth down in include services XXXX lower return So materially profitability, stronger market, significant a

less velocity. and We did have as this resources and product dollar our accelerating more we while enter we debt all U.S. XXXX,

and dive We in in net adjusted full year of and $XX EBITDA. the $X details Let's billion start generated in million XXXX. deeper income nearly

and revenue $XX million but $X.X was transaction saw in revenue, in largely subscription total was year-over-year. a this down revenue. services We by billion, XX% Our offset increase a decline

billion declined expenses total expense this, full $X.X billion. on development and $X.X and general a and basis. technology administrative declined year-over-year and operating Within marketing, Our year sales

we volatility improved largely XX% results. in approvals expectations are with and QX revenue. We increases trading our for by reengagement Turning All in had from market $XXX and transaction our advanced and volumes lower This QX but the crypto was share levels. by QX increased and unless otherwise fee on result, were Both around materially to driven simple saw volume volatility, roughly strong XX%. increase and traders. Notably, our broader impact average of to condition end the simple on revenue by trading a QX an prices to rate of comparisons I'm increase volatility traders. levels excitement going growth basis, These the a was resulted quarter-over-quarter QX mix And of meaningful advanced in a of similar the as up of our those the and noted. saw began and XXXX. both XX%, quarter. macroeconomic amongst million, Bitcoin blended respectively, ETF average XXXX. The QX transaction similar to advanced

As to both price and for future a institutional pricing may continue changes our models and impact with we reminder, quarters. experiment consumer

average see fee be change shift our you fee blended to did is material platform. any our And we clear, to to not the that rate structure simply make due mix on reported in QX. However,

year In with subscription experienced in influenced QX as XXXX from expenses. marketing was million. and EBITDA performance. We to platform. was quarter which We and The and primarily the by services income million to legal financial was quarter, inflows strong staked of strong spend, primary up to by million, our unit adjusted was growth decision $XXX billion another performance higher result closed of driven saw fourth QX $XXX operating a spend million, full net expenses we native revenue. prices. blockchain Expenses just the was income growth $XXX XX%. USDC platform. On revenue XX%. net crypto increased increase QX of X QX and growth on in total turning the We and on up our were of and asset rewards, Now year seasonal assets in $XXX under balances. custody in bonuses saw were benefited items. growth. increase our driver $XXX

a valuation $XXX First, we noncash million. released tax of allowance

favorable we repurchased of million. had of $XXX convertible our debt, Second, million XXXX which P&L a impact $XX

XX, off is is weeks Overall, our quarter. Through about the Now quarter turning transaction million. strong to first This February for start. QX revenue was outlook to of XX-week $XXX of X the a XXXX. approximately

QX. across looks simple, seeing similar strong institutional it trading. Thematically, are to advanced and trends We

We to driver and $XXX we revenue expect within QX crypto being million prices $XXX the largest range. subscription million, range and services between that where with perform of

terms expect primarily we and by In We in modestly expenses, provide administrative development to and the $XXX million technology expense to grow million, general additional compensation. of driven context higher and letter. stock-based to $XXX

marketing to sales million seasonally we spend. expense XXXX business, to and $XXX what year driven a strong expect NBA million, modestly our $XX QX We to lower brings. In for and decline closing, capped to are excited by

to of turn we I'd like questions, our Paul hand it Chief on case. Officer, to an the over SEC to our Legal status Grewal, Before to share update

Thank you, Alesia.

courts. are our clarity the of Brian we and mentioned the seeking outset, through top one priorities that As at venue through clarity which is is one regulatory

We the the our continue in early progress litigation SEC. see stages of to with enforcement

on on SEC. January judge that is a defendants statistics that and see our make oral in argument judgment hard issues strongly attention to for always any early are we a very we entirely case. of to law, our the understanding case matter XX, at oral right month, something court very as of matter of still case this for last stage, are the It's and This dismiss against motion But to the careful we the held Just the this grateful clear. court's at argument. deep the stage believe

which any specify for The of dismiss at could for line ready the There stage. entirety, but this dismiss decision. claims the any some complaint court time. next? The is discovery, multiple are them. are be claim that court can then is or none others of not that process potential dismissed early what of is the a claims, subject outcomes, submission did time the will but not its under not and the So is in we of motion take Any dismiss

We is are include that step, both next for if which sides. would ready the for discovery, discovery

we clarity to much for can and before to similar case That the opportunity discovery before summary the file will pending After a Whether the in type that case. dismissed, is trial, our of motion to it is end get have trial the trial. have motion case long disposed we'll goes is of judgment, the we which motion Ripple the that or sought.

outcome, sooner the facts or in comes on because on confident right we're We the later are law. right whether it the and comes it

Thank questions. to you all. With that, let's turn shareholder

shares. We are taking the most uploaded questions as determined by the number of

The Alesia? first their daily. insiders continue why do sell question, shares to

some around Thank you opportunity share for the to this topic. context

in our First, have all phone all of long-term our of conviction Emilie, insiders, those we and on all the Paul, myself, Coinbase. shared insiders, Brian,

of to believe and significant want closely interest a we I point equity the We compensation our our stockholders. Second component of is insiders offered to the that employees alike. this make, most performance incentives and aligns business

in the governed Board insider's SEC Nobody Coinbase. are only small total companies. by holdings corporate are trade to we these news. via company that it's stock that governing sales Third, And policies executives plans of Last, can important account amongst movements, trading real-time that is price a plans commonplace public for based trading note rules. on these maintain portion and

predetermined of advance. Further, plans financial insiders the they're to number well All required price. disclosed at a sell and our a or public shares filings, in our ability be in time trading set to predetermined allow they are up of

we thresholds opportunities was to holding a long-term sales Coinbase. are stock XXXX. conviction met want Our And up in in I of the as just executed. at some were But all result, XXX% nearly were and those close,

expand plans? be market is this The and to into shift markets. quickly of outside needs What U.S. European our both the the to go Brian? Coinbase to custodian seen the will forward? next the revenue within abroad. shifts ETF drivers and going evolve Let's nimble, plan question. We've How your

Yes.

be Coinbase I'll see focus ETFs that platform. there's for on always our a since ETF on play And and win-win we're to around said the that buzz question we've it. would So out starting of been lot a

Coinbase we And Bitcoin So won is a result. of XX in billion Bitcoin as this the preparation $XX mandates about ETF issuers. today for custody launch, assets spot custody from in of X XX%

billion into entire inflows the we've industry, net $X spot across of Bitcoin So seen ETFs. over

Bitcoin ETFs it November The to in records. breaking These launched X when a $X did gold that get weeks. XXXX, And few year ETFs are billion. took to in

in been file And so really X this is monetizing via helping trade We've way to for for applications. with We're example. helping only trading is just also for the named some now a really as We're Prime. isn't the ETF custody we're an settlement. these of incredible the ETFs, start. issuers ETH -- the financing custodian This with ETF that really of X this. beginning. And starting We're see Ethereum sorry,

So there's generate other here. opportunities revenue to

institution have now really elevated anybody class every been crypto. inflows every here. for worried is important most partner will date. hold and crypto, adopting across ETFs standard trusted industry, which been What's engagement positive The asset officially institutional to Coinbase. This about and diversified a net that is for system additive good, be For has part starting the even more to of the seeing is financial is Coinbase QX cannibalization, We're is portfolio. both retail and the

question, venture their hidden seem doesn't gem be valuation as Street that a portfolio in Coinbase's Wall company. taking to is a of Our into next Coinbase consideration

potentially During your this the earnings long-term in highlight and portfolio materials, Emilie? opportunity. can its call you and

reported the value way, a undervalued mention is fair at I portfolio strong long-term have held our opportunity, the Yes. advantage should Well, think disproportionate not and at on that I balance in our the market. cost an of I definitely agree, we it's is value. sheet By

the days make was the joined is companies I Brian ventures we when to time in early ago X Google others. or talked emerging and Internet companies Facebook in companies most such of and Those I what of [indiscernible] things the investments able the and that of have as Stripe a first years Shopify. and one So exciting been like about

that started startups, team mentioned of of or resources. space as is investors So our competitive view view the before, that. investments scrappily [indiscernible] it Coinbase who XXX crypto our and is founded that's We one in in started One dedicated than the that one We we in most opportunity active advantages with with the now investing we very ecosystem. ecosystem. example with portfolio. the no are and our [indiscernible] having great just relationships what Brian great I more the Coinbase Farcaster in

we a take the very mentality. in now also It's and One when stay the kind seeing sells of the invest We We double a others of We long-term to tremendous market we're frontier it panic when is because down view. it love connected helps are And area fearful. don't to herd around us crypto the energy off. creator the right economy. opposite ecosystem.

There's been X% reinforces lot developer really annually is for blockchain losing outside the we XG So Latin semiconductors decentralize protocol Paragraph, a should because gaming, restacking to are and since ecosystem. U.S. the is XMPT, other lot exchange And that the legislation, across strong thing consumer other just a And U.S. really a same we're moving are a of huge of excited The global us and the we on globally. and the applications India, lack also U.S. venture portfolio I companies developments we there's footprint One of crypto social regional U.S.'s of such outside about. We're platforms this lot a the as the It's think crypto, and that of currently these pushing share a also to mention squandering. clear has is Africa growing like clear opportunity need regulation and existing excited on interesting XXXX. new of that America, our are of in we're has huge It as media looking such all as following onchain offshore. innovation pattern about platforms. messaging investing side, have looking then Farcaster, social and it's regions. ahead, of then opportunity the why seeing U.S.,

Great.

that, take with Sarah, questions let's analysts. switch and from So the

question comes first the of line Worthington JPMorgan. Ken with Your Instructions] from [Operator

I And the Ledger there in We wanted payments. to to is XQ. partnership with and into more dig the with updates Commerce clearly, a Circle. earlier relationship little you noticed the enhanced recent announced

different So kind maybe pieces fit do drive trying what the first, to of to together you're how build.

is model payments? is the in cheaper of Second, for use XXX-day vision? And there like it Or retail revenue lastly, year Coinbase look and asset-based? it for transfer transaction-based? more for institutional in is this basically Or terms does what remittances cases, Is then a clients? longer-term the

Yes, Thanks, take one. that can Ken. I

opening is instantly on you you free. opportunity. mentioned, we about that the exploring can So XXXX in the the that excited one in of USD did payments I'm an utility, announce as in we're world Base and that as mentioned last I areas around anywhere and that send pretty for comments year, Coin

the start confirmation and So more the you'll the the cost are the starting friction, really times reduce more And payments transaction you down. and to fees see. to come

huge industry. And so is payments. of a there's Payments cases different use a for variety

Some you the have currencies of emerging could there's and great there. people want inflation to a so has access in where People at markets the high can this you look dollar local dollar. brand -- where

of have of that's a regulated a USD that. them they're partner with we option and partner. to the a issuer gives great now that trusted with do and So great They've Coin been able stablecoins kind They're Circle.

going emerging demand to course So to ordinary in inflation the as people starting local they're hedge, those a dollars, have their instead I want experiencing currency once for with they're of those think, where an day for pay start markets the dollars that is inflation. then the to point. And of things

ordering and it's to for for Europe of shops, they're So cross-border. cross-border, in some or of their from these said, BXB, remittances. goods services Asia of some of that some you of it's is it's there's people some Like markets some

like yield great their you they of in asset. it that's is with USD these better. a yield to just hedge earn -- of but is on start, also Like earn as even can want Coin, some inflation Some if an

use that of case. market sort there's emerging So

like which make also then spend their We're accepted. way you innovative. of and in other payments crypto to easiest has Even on mentioned And anywhere areas dabbled Visa in simplest, really launched this the onchain Coin the Internet. Coinbase protocol, allowed we've USD pay Commerce is crypto Coinbase payment is to kind trying that Card people to

use mean, a in we financial We if want have have I system, there's system, and to cases. I vision right? out, asked the the here. of you different global larger kind of role and to a want zoom really about the want larger you what's to mean percentage lot play greater So of financial longer-term time. crypto it be a greater over GDP update

improve crypto Base, seen And other we've look asset is off time I so need layer X come And has at one. but that. think the like being really now trade, can people as huge started payments a is we areas. And solutions how as in it invest start to to class online to these now

all stage. look, monetization mean, also. early really You is this asked I about

kind of have we any like or on So forecast it don't anything that.

monetize us you for here also via pieces financials in can of via opportunities today. Base there's But our which to see Coin, USD

long all So that's term.

lot if opportunities use arrives drive of over but know X Money they from monetize of even benefiting I that instantly they're that's to be even crypto They even days. think a business underneath, how just deal eventually billion think may fees get people X it's this. there'll can we are time. not And it with -- a I people crypto, if think just crypto, -- as don't of we case waiting instead lower.

with Your comes & next Compass the Chase question Trading. from of Point White Research line

us in seems bull into each part, revenues items bit by So the than we're lot mean, OpEx item and potentially a that now which I line really obviously, least revenue to trading cycle a guidance getting conditions. be pretty just driven appears stronger least heading line across in market that the board, volumes higher. to, it. came we're It higher higher clear at into and most a drive should at and

they were to color current we the grow stay cycle highs there should and to little if prior is would OpEx even on where dev business with that run for higher? rates flat the great. So about a a line how revenue? Or they the should G&A or various need return marketing lockstep significantly Like items in to kind Just of from tech are? be think

Chase. Thanks, to answer Happy that one.

variable are expenses. that those So will with largely broadly, transaction we have track revenue costs some our growth, and

minor with of As that costs XXX% includes just that with payout revenue. Those and it transaction various correlation fees, verification staking and we've shared our includes includes the ones rewards. with also you, drive will

We costs have variable other support add, CX example, to for a few costs. more will need customer we

We will very will volume, a significant we see some adding need expenses. can growth if more network support We add to volume it be without of but modest. absorb lot

streams. That base said, we in continue revenue our to invest look at proactively expense our and diversifying

make that later year. so very to And Street upmarket, we in QX, be decision QX results. see modest we will transparent we on this an our where we changes outlook with expect the if ourselves prolonged a if to expense We've very we for may choose given increase expenses, some but

way time, for this the expect changing you at in few point that so the And year pretty months. expenses be to with in will in you and modest next communicate

comes the with Owen next from Lau Oppenheimer. line Your question of

a a Hearing that it that not a tool At that raise to was terrorists. Tom with Congressman put attention. Even it House digital even report report appear yesterday, enough Hamas about Undersecretary inaccurate, assets Emmer doesn't correct fund though Chainalysis popular to and gets confirmed for using was crypto record,

in here. customers protect have anti-money to also your investments to reaction you Coinbase's please laundering I program conversation? questions X that and your So talk about Could

investments really Hearing thanks the We Owen, here. that. significant Thanks, and that were noticing with One, we correction have pleased yesterday of for really AML. House the and pleased see to record in

maybe We're proud our hearing frankly, large by of compliance very We regard. in the and as pass with reaction be the NYDFS. has most or it share this team licenses bank. have in really governed over this the compliant will and Paul's approaches Bitcoin with license I to same space Paul. any I'll one how are world to to you, standard crypto We other companies, MTL the a fintech our rules best-in-class and compliance follow that

to That the pleased he the Thanks, which this Chair actors also clear that Hill, Nelson, law been that Mr. were digital when all for bad against of prefer been is to that a have important use than digital have still Secretary, what limited been Alesia. time. And of pay very international ahead careful assets enforcement Israeli of that and we've see I saying the finance confirmed have collaboration Congress French activities. could not We something with its traditional we Subcommittee, attack successful attention observed an published rather been to very validation think use along, its Undersecretary assets that Under their Treasury Israel. reports was very, the to had made explicit that issue. of the saying Hamas fund long prior

clear. So confronted are the that with the those Congress is finance. problem think facts, the answer an solely to And we that we is problem. the crypto not of underscoring facts pleased is are that illicit when It

from Todaro Your Needham with the next Company. of & question comes John line

congrats great on on pretty off, results the questions First the business. institutional I X here. quarter, have

that volume? QX into of if as revenue of to there 'XX, makeup up. then that was where moving about there ETF went that more as greater Base derivatives? And understand institution total some we institutional other think share should platform it the activity whether we institutional So Bitcoin was has driven that a the chain looks the on forward, like Trying think had that revenue, or what second, or went take rate drove

the for John. question, Thanks

providers X products. our Coinbase in Coinbase is and is rate makers Prime. our product fee revenues liquidity exchange, where on has Prime institutional directly the the market So higher One exchange. which the the a are other markets business, embedded we transacting is than have really exchange and

the see the we're so which we a Coinbase And side, QX, larger rate in to mix the And similar of drove rate consumer the shift average on increase fee volume of and fourth it fee driving in strong had that blended share institutional. in growth Prime, seeing quarter.

retail additive to have Coinbase. net on positive question ETFs into shared his institutional industry second to we're the well Brian and we your just earlier and engagement been net more in to As Going as as And elevated and date. activity? ETFs inflows seeing for QX Bitcoin response, shared on have driven

next Your the with Ryan JMP comes line question Devin of from Securities.

like sizable accelerating I you bit have track, very a derivatives volumes acceleration the exchange. seen what seems it's From international recent in it weeks, quite even guys a on can in been Great.

nice know to larger And momentum is there. market. the see market obviously, we So that than the derivatives spot

So, thinking longer I that scaling potential the frame you're broader how term? how off, already you about would relative guess, to you're the experiencing first

that user and what there where take second, rate over now? user matures? is it you take then like rate on look And as mix see And the time moving then do profile

off Yes, then on and some it on derivatives I'll I start take rate question. can you Alesia, maybe of the turn to

tracking. for thanks So

first the Coinbase just International compliant daily on has days, been definition. counterparty fits still that It's come to really to along all-time clear, be really think, but early really that And our highs great. is the they have want hitting trusted a way. We they've built a I Exchange has which in company been see seen demonstrated market, here --

So will like additional up making announced QX. derives acquiring features new We member QX. in been help been a adding TAM. in global MiFID leverage, lot that EU unlock us about exchange. markets product that now to license added on did We're of about progress XXx a XX XX We we're in derivates XX% states. our international that We've we've of new

had Exchange we QX. about notional about it's volume in think $XX billion traded on I in International --

Coinbase on So great. Markets really futures, thing, U.S., U.S. Financial we good been has the got for it's in been to way, progress that. Same the trade license really by which

so, think today, International Exchange. period actually just we $XXX it XX-hour in a was that that surpassed yes, on million our was daily And milestone I

start. great So early really

the that's to And clients going to it, majority I continue derivatives to think want XX% of volume. prefer volume by is actually trading counterparty take trusted is at the a of brand are rate about but Coinbase that on do all that. crypto following can help them it is that The lower rules. trading least. is the

just glad to take build business you And so add I'm in our want that starting we're anything really rates? area. Alesia, now that on to

Sure.

in are As just we Brian derivatives. that said, the we excited getting started. early progress days are We're about

current is gain market our As really share. such, goal to

and as to be liquidity adjust time. right experiment tiered going build We pricing we'll users to we over it's But and attract now, are and offering scale. competitive

question from Benjamin next comes with Barclays. Your the Budish line of

you of business. also confirm on are not Or through bit the what any you're little maybe institutional that within doing are services earlier that questions just metric to give? assume follow wanted or would of Prime confirm there? monetizing on what provide? are the into are you And confirm revenues do But execution. Prime up the reported you you there's I I Can the reported? How specifically dive they one that kind a you a Obviously, of of sort volume can them? some

subscription Coinbase of comprises shop suite Why the When We those revenue, is our the X at it custodial large are I fee including And trading, in It separately growing. that financing in products, and now because are for the one-stop this? trading Prime largely look is start nascent is So that largely and business financing, you revenue. institutional business. other that a with transaction is still disclose custody, services right our don't institutions. umbrella.

broken haven't item. disclosed as out it separately line We a

Your next Citi. question Pete line from of Christiansen with comes the

shift you're business would little a Maybe efficiencies. guess, into impacting bit to I be maybe would the and class, flattish, more I'm mix talk a asset lean little the retail of you wondering QX. want seeing to or if sales between surprised different there. that's dynamics. better in seeing or think up, was just could institutional the you're expected I is I international it status marketing to those picking Coinbase marketing Alesia,

you're the through progression this how you can if and us setup walk year. wondering seeing that Just for

Pete. Thanks,

is actually a spend we NBA of sales marketing and have So with spend in contract. part seasonality brand large an our and

between see leading contract And QX are QX, we guide QX to a that reinvesting. a we we but spend where that less so to what materially areas, for in shift NBA spend which direct other down you is and versus is QX, slightly will spend where on

Emilie of really in and answer year lean on those ROI invest We of strong stride really proud the like and see are are with call our to marketing return where we hit We last some efforts, those investments. continuing to feel our and and marketing strong I questions. we over might

that the and Thankfully, especially program. going across And ROI very implemented of one the we're marketing get I that as to more to policymakers. things boundaries we've more been policy to we it, and demanded have think the into marketing our high investments the expand since continue that's messages we've of to test

the Tiger question Pei from Bo of U.S. comes line Your Securities. with next

Management.

on -- rate. the take take So some rate retail question

class mature, recent So most more now is a with to asset expect the should believe this asset Bitcoin And one approval of a crypto ETFs, mature become as spot trading new class. becomes more people asset becoming cheaper. typically,

sophisticated to X% like cycle volume the crypto And years or the in the more offset gradually can expect decline? in you take believe do below think So traders years? this than see If last X.X do this X rate do crypto do the become Advanced to to the increase have happens, you more migrating more you take investors And you rate decline trading now? platform? Coinbase

that And that ETFs see we a well. quarter. went rate our yet fee to we public, rate as to and have we of phenomenon Thanks, we've question have every Bo. fee I'll Since on on received platform, compression as the a or yet see and cannibalization result share.

-- as with we've As as any Coinbase, seen our the for we shift behavior our net We've always to industry in not across you choose the that we and positive quarter-to-date we a seen retail thesis being industry we overall we and as net shared, you even ETFs. not institutional continue more in our But board across and the time. engagement clients. see should a with we positive We've inflows see both add security retail both net product see net ETFs have of of come the do and for QX, today, some with breadth that shared seen result our of and over fees to institutional, think the for time, with will that Coinbase down. offering, that, platform, continue to customers commoditization, the for the agree you persist customer see

Yes.

net just billion want $X about in the of Bitcoin seen I Sorry, launched. the to we've industry, just a since mean, add. I inflows reminder, ETFs entire

think we really the is system. update crypto I that's financial want thing here additive. really to The remember to global

So want to and financial of are sitting of means vehicles. and time we come happens, cheering in. more parts for into capital to to fees integrated down We need that, different more that friction get ETFs come lower massive crypto more the here we're it system. Every get that make way into it people to for a kinds all get through to it.

seen we have far, not So cannibalization. any

additive coin date. institutional we're and on both engagement for it's and QX seeing As Alesia retail elevated inflows been said, to net base, and

to vendors, sheet, their get to payroll. We ETF we way, just to totally And view, GDP. we've their more wet crypto using with whether more in doing this better happening want ETFs holding can. crypto, other and ways, every power of on the in thing. got global of balance paying institutions the be So opportunity more And it my that an the eventually their are through a other going positive it's get kind they're or any feet through because

I for incredibly are positive, think, our ETFs business. So

question comes Genuity. Canaccord the from Your with Vafi Joseph next line of

my previous investors, versus for mean the I'll focus to results. a but question I got thought versus that. but the ETF lot underlying and the owning ETF Nice your few, maybe some you in underlying I'm about owning may I've follow-up spot differentiation an just same a spot on seem an sure one. a owning the

And hear versus owning an perhaps of would be so it the outright owning ETF. a what to is great see you benefits Bitcoin

just I'll can start pop Alesia, in. you guess, maybe and I

we to that? the we things we've have Separately, able strongest crypto so are on we in do competitive role best this sure add something where different separate Coinbase of was chain. value of that. the because the where play solutions much in as advantages. to And that assets, wanted for we invest One we're the clients invested But play kind in also each ecosystem to share us working from make that's to why these custody solution can different to and Alesia, anything CBAM, Prime in Asset Management, felt were play, we in and majority garnered part the trying have area when to we that think to of want us for and invest I role good ETFs. the the services, a really the it like with we it's

share One of customers Most customers that on more is just X thing than the platform on majority Bitcoin. crypto more own assets. do I'll than our

look for you our XX% not Ethereum, our other If not of Bitcoin, trading QX crypto not volume in was at USDT. assets, trading volume

the adoption, the is seeing So that that that a want introducing to that's I their asset. excited this Bitcoin, of folks we've coming in want XXX(k), and they where is market, were we spot to that more Bitcoin believe ETF start learn more to another stake. folks people the growth, in more want to decentralized what asset we're new seen invest ecosystem think not invest the what may about capital, is fund, applications. want explore that They about to use awareness to crypto that a and often when asset, class. But then They become they

expansion class. in the believe to asset see space. is we're so just And and to the be delighted We investors additive this users of net going to this

more for Sarah, please. we one time question, have

line Markgraff KBCM. the Alex with of Our will question final come from

I for first X, Paul, one if Maybe could.

on decision not Just rulemaking. in engage SEC's on to challenging the

you of Just an us give here you're range the looking the of process sort of overview that and could to? outcomes

do I'm happy that. to

our it to this see On arbitrarily spring. decision acted appropriate -- of discretion opportunity time. to and Third arguments briefing in those our petition the will forward begin the whether that and our formal its that at request request to reject a way, the court Circuit the see and in Appeals, is moving to the the filed our denying challenge confident within look request. course, of briefing denying continue or We for acted deny A were Third rulemaking. of will Court challenging Circuit for or the the month That we into we We're of referring, in next ahead. on our You're presenting that schedule. set rulemaking gratified capriciously SEC SEC question

we that's and you for for all Thank with again speaking today. you next look to it quarter. Well, us, joining forward Great.

call. today's concludes This

now may disconnect. You