**Coinbase Suffers a Dip Amid Weak Crypto Trading in Q3**

Coinbase has reported disappointing third-quarter results for 2021, missing analysts' expectations and leading to a drop in its stock price. The cryptocurrency exchange saw its shares fall by more than 4% in extended trading following the announcement. According to a survey by LSEG, Coinbase's earnings per share stood at 28 cents, below the expected 41 cents. Revenue was also lower than anticipated, coming in at $1.21 billion versus the projected $1.26 billion.

Despite these setbacks, Coinbase did report a notable change in its net income, achieving $75.5 million, or 28 cents per share, compared with a loss of $2.3 million, or 1 cent per share, a year ago. However, this period included $121 million in pretax losses from its cryptocurrency investment portfolio, attributed mainly to the decrease in crypto prices from June 30 to September 30.

On the bright side, certain segments of Coinbase's core business displayed significant growth. Retail trading revenue surged 98% year-over-year to $483.3 million, and institutional revenue reached $55.3 million, marking a 292% increase. Total transaction revenue rose by 98% to $572.5 million compared to the same period the previous year. Conversely, the revenue from subscriptions and services, which encompass stablecoins and staking, experienced a mild decline of 7% to $556.1 million.

The broader context for Coinbase's performance is rooted in the persistent doldrums of the cryptocurrency market, which has remained relatively stagnant throughout much of the year. Bitcoin, in particular, has experienced low volatility as investors remain cautious, partly due to the U.S. presidential race. Coinbase has also been proactive in lobbying efforts, investing millions in pro-crypto political action committees.

A key highlight for the company has been the performance of stablecoins, considered by many as the most promising application of crypto. Stablecoin revenue in the third quarter rose to $246.9 million, a 2% increase from the previous quarter and a 43% jump from the same period a year earlier.

In a strategic move, Coinbase announced a $1 billion stock buyback, signaling confidence in its long-term value despite the short-term challenges posed by a sluggish market and the anticipated pressure from declining interest rates.