Coinbase (ticker COIN) reported $718.7 million in net profit for the third quarter — defying the Wall Street consensus forecast, which had expected a loss. At the same time, the same report disclosed plans by the CEO and one of the founders to sell up to 13.6 million shares over the next 14 months.
This package represents about 6% of Coinbase's 223.7 million Class A shares and, at Thursday's closing price of $160.59, is valued at approximately $2.2 billion. For COIN holders, this is a new influx of shares into the market against the backdrop of a shrinking core business.
Profit came not from trading, but from revaluation of crypto assets
Revenue declined 35% to $1.22 billion. Transaction revenue fell 44% to $590 million, while spot trading volume among retail clients dropped 59%. Operating income was $61.7 million versus $480.5 million a year earlier.
Almost all of the net profit was generated by a paper revaluation of crypto assets on Coinbase's balance sheet — this gain amounted to $715 million and depends directly on token prices. Analysts had expected a loss of $0.15 per share, whereas actual diluted earnings reached $2.51 per share.
Part of the decline in the spot market was offset by fees from prediction markets — platforms where users trade contracts on the outcome of events. CEO Brian Armstrong estimated annual prediction-market revenue at above $200 million.
"We just published our third-quarter results — despite a challenging market, we set new product records. I see the first signs of a market turnaround," he said.
Founders' sales — twice last year's
Armstrong formalized a plan on August 12: it allows the sale of up to 8.17 million shares from November 16 through October 2027. Co-founder Fred Ehrsam's plan covers 3.87 million shares, and President Emilie Choi's covers 1.56 million shares through 2027.
All of these plans are structured under Rule 10b5-1 — these are sales schedules that top managers arrange in advance without possessing insider information. Coinbase requires all insider transactions to go through such a scheme, and each plan only operates when hidden price levels are exceeded.
The scale has changed: Armstrong's plan a year ago allowed the sale of 3.75 million shares — less than half of the current quota. Coinbase still has approval for a $1.96 billion share buyback — this will smooth out part of the supply.
COIN shares are trading 56% below their 52-week high of $361.40 and were little changed in after-hours trading. Form 4 filings for November 16 will show whether insiders are locking in profits amid Armstrong's promises to turn the platform into an "exchange for everything" at the intersection of crypto and AI.
Cryptalist analysis: The key risk for COIN is structural: earnings quality remains low, since it depends on the volatility of balance-sheet crypto assets rather than on operating activity. At the same time, the doubling of insider sales quotas signals that management is hedging against the risk of further correction. For institutional investors, the stock's resilience will be determined by the dynamics of prediction markets and the monetization of the AI direction, rather than by one-off revaluation effects.