In the cryptocurrency trading field, Coinbase has become an undeniable giant. The company's success relies not only on its core functions as a trading platform but also on a diversified business model.

The advantages of Coinbase are first reflected in its compliance and security. These two points have earned the company the trust of users and provided assurance for maintaining competitiveness in an increasingly regulated environment. The company has a large user base and institutional client foundation, which not only brings considerable trading volume but also lays the groundwork for the development of other business lines.

In addition to traditional trading operations, Coinbase has developed multiple sources of income. Non-trading operations such as subscription services and interest income provide the company with stable cash flow, reducing reliance on market volatility. The company's business scope is very broad, including trading services for both retail and institutional clients, derivatives trading, asset custody, USDC stablecoin issuance, and staking services. Notably, the company has strengthened its position in the derivatives market through the acquisition of Deribit. Furthermore, Coinbase has launched its own Layer 2 network solution, Base, further expanding its influence in the encryption ecosystem.

From a financial perspective, Coinbase demonstrates a high level of resilience but also faces significant volatility. The company's revenue and profits are expected to rebound significantly in 2024. However, after a strong performance in the first quarter of 2025, the second quarter saw a decline in trading revenue due to decreased market volatility, with net profits primarily benefiting from one-time investment gains. Nevertheless, the company's balance sheet remains robust, with sufficient cash reserves providing a buffer for future development and potential market fluctuations.

The main advantages of Coinbase lie in the moat effect brought by its compliance, as well as strong network effects and economies of scale. However, the company also faces some risks, including the cyclicality of the encryption industry, the uncertainty of the regulatory environment, intense market competition, and potential security incidents.

For the valuation of Coinbase, analysts typically use metrics such as price-to-sales (P/S) and enterprise value to EBITDA (EV/EBITDA) to determine a reasonable range, generally leaning towards optimism. However, investors need to closely monitor several key factors when evaluating the company: the development of regulatory policies, market trading activity, the performance of the derivatives business, the process of internationalization, as well as changes in metrics such as monthly active users (MTU) and assets under management (AUM).

As the cryptocurrency market continues to evolve, Coinbase, as one of the industry leaders, will undoubtedly have a profound impact on the future direction of the entire sector. Whether the company can address regulatory challenges while maintaining innovation will be a key factor determining its long-term success.