this stock is up 17% but why?

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Coinbase just dropped their Q4 2025 results, and if you were looking at the headlines, you probably saw a bit of a mixed bag. The stock is up 17% after hours, but as always with COIN, the devil is in the details.

The Raw Data

• Revenue: $1.78 billion (slightly under the $1.83 billion estimate)

• Adjusted EPS: $0.66 (missed the $0.96 forecast)

• Net Loss: $667 million for the quarter, mostly due to unrealized losses on their crypto holdings.

How to think about this as an investor

When analyzing Coinbase, it is easy to get caught up in the quarter to quarter volatility. Here is how I am breaking down the signal from the noise:

1. The Retail vs. Institutional Split

Retail trading revenue slumped about 6% this quarter. This is the "boring" part of the cycle where casual investors sit on their hands. However, institutional revenue grew 37% Q/Q. This tells us the big money is not leaving, they are actually scaling in via the Deribit acquisition and professional tools.

2. Diversification is working

Subscription and Services revenue hit $727 million. This is the "high quality" revenue we want to see because it is not tied to someone clicking "buy" on a meme coin. Their USDC stablecoin holdings are at an all-time high of $17.8 billion, increased 18% Q/Q, which provides a steady yield regardless of market direction.

3. The "Everything Exchange" Pivot

Management is clearly trying to move away from being just a "crypto broker." They are pushing hard into tokenized equities and 24/7 derivatives. In my view, the long term play here is Coinbase becoming a global financial super app that happens to run on blockchain rails.

Overall,

• Total trading volume grew 156% Y/Y and crypto trading market share doubled in 2025

• Assets on Coinbase increased 3x over the last 3 years

• 12 products generating >$100M of revenue on an annualized basis

So are you bullish or bearish?

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Pete
Invest with Pete

🚨‼️ By the way, I’ll never PM anyone on telegram or any other social media platforms. If you receive any “Pete” messaging you, these are scammers impersonating me. Pls beware!

The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.