Coinbase has learned the Chinese 996 work schedule.

CEO Armstrong boasted on Twitter: the New York team has rallied to work overtime to develop the Everything Exchange, working from 9 am to 9 pm, and even later.

What was originally a simple update sparked intense debate in the comments: Western users criticized this as a pathological culture of overwork, while Asian users casually remarked, "It's normal in China, nothing to show off about."

However, 996 is just a surface phenomenon. Behind it lies Coinbase's true anxiety.

In Q1 of 2025, Coinbase's net profit plummeted by 94% year-on-year, with trading revenue experiencing a comprehensive decline. The Q2 financial report showed a net profit of $1.4 billion, which seems high at first glance. However, this figure is largely derived from paper gains from Circle investments rather than self-generated revenue. Therefore, Coinbase's actual spot trading business is still contracting, and the onslaught of ETFs, on-chain trading, and competition from Robinhood has made this once "king of compliance" increasingly passive.

This is not a unique predicament for Coinbase; exchanges are all seeking a more intense 996 and a more spacious transformation.

Because the issue facing companies like Coinbase is becoming more acute: how long can the golden age of cryptocurrency exchanges last?

From Wall Street to Washington

As early as five or six years ago, Coinbase understood that to go further, there were four words exchanges could not avoid: legality and compliance.

One afternoon in 2019, Brian Armstrong walked into Capitol Hill for the first time. He held a presentation, prepared to explain cryptocurrencies to the legislators as he would to investors.

But the questions that greeted him left him speechless: "Oh, so you're the CEO of Bitcoin?"

Someone even asked, "Is this some kind of video game?"

At that moment, he realized it was not a debate but a "cross-species communication."

In fact, this was not the first time Armstrong had been forced to confront "misunderstandings." Before Coinbase went public, he had recounted several times the lonely moments as a founder — during those years when cryptocurrencies were still in a gray area, hardly any banks were willing to work with Coinbase, making even basic tasks like payroll and corporate accounts challenging.

He admitted that at that time, every negotiation felt like begging the traditional financial system for a way out.

During the early days of the startup, Armstrong naively believed that as long as they followed the law, they could single-mindedly focus on building a product. However, as Coinbase grew, he realized that the ambiguity of regulation itself was a weapon. SEC Chairman Gensler used "lack of clarity" as an excuse to open fire on the entire industry; Senator Elizabeth Warren even attempted to portray crypto as "financial poison."

This experience made him realize the importance of "compliance" much earlier and more deeply than the outside world imagined. In contrast to many of the traffic-chasing companies in the industry, Coinbase chose a seemingly slower path from the very beginning: proactively applying for licenses, conducting KYC/AML, and engaging in constant communication with regulators.

Armstrong then understood that if you don't proactively shape the rules, you can only wait for others to pass judgment on you.

So, he began to change his strategy. In addition to continuing to fly to Washington to act as an "educator," he assembled a policy team, contributed to the creation of StandWithCrypto.org, provided each member of Congress with a "pro-crypto scorecard," and even went so far as to invest in the super PAC Fairshake.

In 2024, for the first time, the U.S. presidential election put "crypto voters" in the spotlight: anti-crypto lawmakers were voted out, and pro-crypto new faces were successfully elected. Washington finally realized that a surprising 50 million Americans had used a crypto wallet. It turns out this is not a fringe topic, but rather a set of votes that can be influenced.

On Wall Street, Armstrong played a different card: compliance.

On the eve of the 2021 IPO, Armstrong mentioned in a media interview that Coinbase was able to open the doors of Nasdaq not only because of its business performance but also because it was ahead in terms of compliance. This was also the true meaning of the IPO in his eyes: not just a fundraising event but a "validation"—a milestone that would take the crypto industry from the fringes to the mainstream.

In 2025, he pushed for the enactment of the "Genius Act," which required stablecoins to be 100% backed by cash or U.S. Treasury securities. This was not only a legislative victory but also Coinbase's "moat": as a Circle shareholder, it shared in the interest income from USDC. Throughout 2024, Circle's reserve interest income was approximately $1.68 billion, of which around $910 million was paid to Coinbase;

A stablecoin has become a story embraced by both Wall Street and Congress: to the government, it perpetuates the dominance of the US dollar; to capital, it provides stable cash flow.

And so, Coinbase has completed an identity transformation: in Washington, it is a lobbying machine, shaping rules; on Wall Street, it is a compliance gateway, connecting with capital.

Armstrong once said, "As long as you grow big, even if you don't care about the government, the government will care about you."

This statement is also like a footnote, Coinbase's new battlefield has long surpassed the exchange itself.

The "CEX Crisis" in the Financial Report

For an exchange, legality and compliance alone are far from enough.

Despite still being one of the world's largest cryptocurrency trading platforms, Coinbase's financial report for the first half of 2025 is filled with anxiety.

The total revenue for the first quarter reached $20 billion, showing a 24.2% year-on-year increase, which sounds somewhat decent. However, against the backdrop of a 94% year-on-year net profit plunge, this number has almost lost its meaning. With a net profit of $66 million, not only far below market expectations, but also making investors truly feel, for the first time, that the old model of centralized exchanges is collapsing.

The decline in spot trading revenue is particularly noticeable.

Institutional trading decreased by 30% year-on-year, and retail trading also reduced by 19%. This is undoubtedly influenced by the cooling of the market. Since 2025, the volatility of Bitcoin and Ethereum has sharply decreased, transforming the market from a "roller coaster" to a "flat wind." Both institutions and retail investors have lost the urge to frequently enter and exit.

But a deeper pressure comes from the restructuring of the market landscape.

The launch of ETFs has directly altered the investors' path. Following Bitcoin, Ethereum, Solana, and XRP have all applied for ETFs, which were originally core trading assets on Coinbase. Compared to the CEX's hefty 0.5% trading fee, an ETF's annualized 0.1%-0.5% management fee appears much cheaper, prompting funds to naturally flow to Wall Street.

Meanwhile, the wealth effect on-chain has kept more users within the blockchain.

The trend of Meme and DeFi has formed new habits among native investors: centralized exchanges are no longer just trading venues, but merely "cross-chain entry/exit bridges" and "temporary wallets for stablecoins." The rise of decentralized derivatives has further accelerated the outflow of funds. New platforms like Hyperliquid, leveraging flexible listing mechanisms, higher leverage, and a more extreme user experience, have rapidly attracted traders from highly regulated regions like the United States. To these users, Coinbase's "playing by the rules" has instead become a restraint.

The most deadly competition comes from the heartland of traditional finance.

Robinhood has announced a full-scale entry into crypto, opening the battlefield on Coinbase's most valuable young retail investor base. For them, Robinhood's interface is more familiar, fees are lower, and the one-stop experience for both US stocks and crypto is more convenient. And for large funds, the "brokerage halo" surrounding Robinhood is even more attractive than Coinbase.

This multiple squeeze was starkly magnified in the Q2 2025 financial report. Coinbase revealed that total revenue for the quarter was about $15 billion, a 26% decrease from the previous quarter; GAAP net profit reached a staggering $14 billion, which may seem impressive, but in reality, most of it came from Circle investment and unrealized gains from holding crypto assets. Once these one-time factors are excluded, the adjusted net profit is only $33 million. More crucially, the core spot trading revenue was only $7.64 billion, a 39% year-over-year decrease.

While the books may look lively, reality is stark. Coinbase's profits no longer rely on trading but on stablecoin revenue sharing to stay afloat. This is a harsh report card and perhaps a signal of the end of a golden age.

When Exchange Platforms No Longer Rely on Trading Business

Facing this dilemma, Coinbase has put forward a new vision.

In a recent interview, Coinbase CEO Brian Armstrong outlined a plan: all assets will eventually be on chain, so they aim to become an Everything Exchange.

In his view, crypto is not an isolated industry but a technology that can upgrade the entire financial system.

Armstrong specifically mentioned the current state of US stocks: today, if an Argentine wants to open a US brokerage account, they face very high wealth barriers. For most ordinary investors in most countries, US securities are almost an "exclusive market for the wealthy."

However, if stocks are tokenized and moved onto the chain, this barrier can be broken, allowing anyone in the world to trade US assets at any time.

On-chain also means more possibilities: 24/7 trading, support for fractional share trading, and even the ability to design new governance logic, such as "only shareholders holding for over a year can vote," to encourage long-term investors.

In his vision, Coinbase is no longer just a trading platform but a "universal exchange" that embraces all assets going on chain—an open, inclusive, and round-the-clock financial operating system.

It is for this reason that Coinbase has begun to take a series of actions to align with Armstrong's vision: Over the past six months, it has successively acquired Spindl, Iron Fish, Liquifi, and Deribit.

The first three companies serve the Base chain: Spindl provides an on-chain advertising stack that allows developers to directly reach users; Iron Fish brings a zero-knowledge proof team to build a privacy module on Base; Liquifi offers token management and compliance services, and plans to integrate with Coinbase Prime to provide convenience to institutions and RWA projects. Together, these three have lowered the barrier for developers on Base and created a complete toolchain.

The most significant acquisition is Deribit. Derivatives trading is more stable and profitable than spot trading, but Coinbase has long been constrained by U.S. regulations in this area. By acquiring Deribit for $29 billion, Coinbase instantly gained a leading position in the options market and a large institutional client base. Less than a month after the acquisition was completed, Coinbase launched perpetual futures contracts under CFTC regulation, effectively inheriting Deribit's capabilities seamlessly.

If acquisitions were Coinbase's bold breakthrough against the trading revenue ceiling, then the business expansion it is currently undertaking is a more profound identity reshaping.

It is focusing on areas where the real work is done: stablecoins, wallets, public chains, and institutional services. These seemingly fundamental pieces are outlining a new Coinbase—not just a trading platform, but a Web3 version of Apple + Visa + AWS.

The first step is Stablecoins.

......

For the full article, please visit the 【Dongcha Beating】 official account

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia