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Trading fees are drying up. Coinbase, Gemini, and Bullish all reported drops in trading income during the second quarter, and each is scrambling — in pretty different ways — to fill that gap.
The numbers are rough across the board. Coinbase saw transaction revenue fall 22%, with spot trading volume down 35%. Gemini’s total revenue dropped 27% over the quarter, and its trading volume collapsed 66% year-over-year. Bullish had a 21% decline in adjusted transaction revenue for the quarter, even as it managed a 24% year-over-year gain — which is basically the one bright spot in an otherwise grim set of results. None of these platforms can afford to sit still. So they’re not.
Spot volume is down hard. Derivatives, at least for Coinbase, edged slightly higher.
Coinbase Bets Big on USDC
Coinbase’s clearest move is into stablecoins. The exchange boosted USDC rewards heading into the third quarter, and average USDC holdings on the platform climbed 44% year-over-year to hit $20 billion. Coinbase also captures half of the USDC market economics, which makes that stablecoin growth directly meaningful to the bottom line — not just a vanity metric. It’s a real revenue lever, and the company seems to know it.
But Coinbase also cut costs. Hard. In May, the company reduced staff by 14%. So the picture is kind of two-sided: slash expenses on one end, push new product incentives on the other. Whether that balance holds depends a lot on where USDC adoption goes from here. Unclear yet.
The derivatives uptick is worth watching too. A slight increase in derivatives trading while spot volume fell 35% isn’t a reversal — it’s a hint. Coinbase probably sees futures and options as a longer-term play, especially as institutional interest in crypto derivatives grows across the industry. No specifics from the company on where that goes next.
Gemini’s Prediction Market Push
Gemini went a different direction. The exchange leaned into prediction markets, increasing the number of market makers and rolling out rebates for both firms and individual users. Bets on the platform nearly doubled. And the revenue from that segment? Up 18%, totaling $524,000 for the quarter.
That’s a pretty modest number for a near-doubling of volume. It suggests the rebate program is eating into margins — by design, probably, since Gemini seems to be buying market share right now rather than squeezing profit from it. Whether that pays off later depends on whether prediction market volume keeps growing or cools off.
Gemini also saw improvement in fee economics across both retail and institutional segments, even as overall revenue fell. So the per-trade economics are getting better, even if there are fewer trades. That’s not nothing.
Still, a 27% revenue drop and a 66% collapse in trading volume are hard to spin. Gemini’s in a tough spot, and the prediction market bet is either a smart pivot or an expensive distraction. Too early to say.
Bullish Launches Rewards, Eyes Tokenized Securities
Bullish is the odd one out here. It’s the only exchange of the three that grew trading revenue year-over-year, despite the 21% quarterly dip in adjusted transaction revenue. The exchange launched a rewards program aimed at boosting trading volume, and it’s also pushing into tokenized securities — a space that’s getting more attention as the line between crypto and traditional finance keeps blurring.
Tokenized securities aren’t a quick fix. Building out that business takes time, regulatory groundwork, and a customer base that’s ready for it. But if Bullish can position itself early in that market, there’s a real argument that it’s building something more durable than pure spot trading revenue. Maybe. The execution details aren’t fully clear from what the exchange has shared.
And the rewards program is pretty standard playbook at this point — incentivize trading activity when organic volume is soft. The question is always whether the users you attract with rebates stick around when the rebates shrink.
Across all three exchanges, the pattern is the same: trading fees alone aren’t enough anymore. The platforms that figure out stablecoins, derivatives, prediction markets, or tokenized assets fastest probably win the next phase. Fee competition could also intensify if a new bull market kicks in and platforms fight for volume.
Gemini’s prediction market revenue for the quarter came in at $524,000.
Hub: USDC price, news, and analysis
Frequently Asked Questions
How much did USDC holdings grow on Coinbase?
Average USDC holdings on Coinbase rose 44% year-over-year, reaching $20 billion, with Coinbase capturing half of USDC market economics.
What was Gemini’s prediction market revenue in the second quarter?
Gemini’s prediction market revenue rose 18% to $524,000 for the quarter, even as the volume of bets nearly doubled following an expansion of market makers and rebate programs.
Why It Matters
The decline in trading revenue for major exchanges like Coinbase, Gemini, and Bullish highlights a broader trend of reduced market activity in the crypto sector, as spot trading volumes are heavily influenced by market sentiment and volatility. This downturn may prompt these platforms to diversify their revenue streams and innovate their service offerings to attract users in a more challenging environment, potentially reshaping competitive dynamics within the industry. As these exchanges adjust to the changing landscape, their strategies could have significant implications for market liquidity and investor engagement in the long term.
