Coinbase has adopted the 996 work culture that is common among Chinese people.

CEO Armstrong boasted on Twitter: The New York team has gathered to work overtime on developing the Everything Exchange, working from 9 AM to 9 PM, and even later.

What started as a regular update sparked intense division in the comments: Western users criticized it as a pathological overwork culture, while Asian users downplayed it, saying, "It's normal in China, nothing to brag about."

However, the 996 culture is just the surface; behind it lies Coinbase's real anxiety.

In Q1 2025, Coinbase's net profit plummeted by 94% year-on-year, and trading revenue fell across the board; the Q2 financial report showed a net profit of $1.4 billion, which at first glance seems high, but this figure largely comes from paper gains from Circle's investments rather than from its own operations. Thus, Coinbase's actual spot trading business is still shrinking, and the encirclement by ETFs, on-chain trading, and Robinhood has made this once "king of compliance" increasingly passive.

This is not a dilemma unique to Coinbase; exchanges are all seeking more intense 996 work hours and more room for transformation.

Because the questions facing Coinbase are becoming sharper: How long can the golden age of crypto exchanges last?

From Wall Street to Washington

As early as five or six years ago, Coinbase understood that if it wanted to go further, it could not avoid the four words: legal compliance.

One afternoon in 2019, Brian Armstrong walked into Capitol Hill for the first time. He carried slides, ready to explain crypto to the lawmakers like an entrepreneur pitching to investors.

But the questions he faced left him both amused and bewildered: "Oh, so you are the CEO of Bitcoin?"

Someone else asked, "Is this a video game?"

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

In fact, this was not Armstrong's first encounter with "misunderstanding." Before Coinbase went public, he often recalled the lonely moments of being a founder—during those years when crypto was still in a gray area, almost no banks were willing to cooperate with Coinbase, and even the most basic payroll and corporate accounts became challenges.

He admitted that every negotiation back then felt like "begging" the traditional financial system for a lifeline.

In the early days of the startup, Armstrong naively thought that as long as he followed the law, he could focus solely on product development. But 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 fire at the entire industry; Senator Elizabeth Warren even tried to portray crypto as "financial poison."

This experience made him realize the importance of "compliance" earlier and more deeply than outsiders might imagine. Unlike many peers in the industry chasing traffic, Coinbase chose a seemingly slower path from the very beginning: actively applying for licenses, implementing KYC/AML, and repeatedly communicating with regulators.

Armstrong then understood: if you do not actively shape the rules, you can only wait for others to define your fate.

Thus, he began to change his approach. In addition to continuing to fly to Washington as an "educator," he formed a policy team, funded the creation of StandWithCrypto.org, provided each lawmaker with a "pro-crypto index," and even invested in the super PAC Fairshake.

In 2024, the U.S. elections brought "crypto voters" to the forefront for the first time: anti-crypto lawmakers were voted out, and pro-crypto new faces were successfully elected. Washington finally realized that there are 50 million Americans who have used crypto wallets. It turned out this was not a marginal topic, but a manipulable voting machine.

On Wall Street, Armstrong played another card: compliance.

On the eve of the 2021 IPO, Armstrong mentioned in a media interview that Coinbase was able to knock on the door of Nasdaq not just because of its business achievements, but also because it was ahead in compliance. This was the true meaning of the IPO in his eyes: not just a fundraising event, but a "vindication"—a milestone that brought the crypto industry from the margins to the mainstream.

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

Stablecoins became a story that both Wall Street and Congress could agree on: for the government, it maintained the dollar's hegemony; for capital, it provided stable cash flow.

In this way, Coinbase completed an identity transformation: in Washington, it is a lobbying machine shaping the rules; on Wall Street, it is a compliance gateway connecting 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 serves as a footnote; Coinbase's new battlefield has long surpassed the exchange itself.

The "CEX Crisis" in Financial Reports

Being legal and compliant is far from enough for exchanges.

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

Total revenue in Q1 reached $2 billion, a year-on-year increase of 24.2%, which sounds decent, but in the context of a 94% year-on-year drop in net profit, this figure has almost lost its meaning. The net profit of $66 million not only fell far below market expectations but also made 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 fell by 30% year-on-year, and retail trading decreased by 19%. Behind this, there are certainly factors related to the cooling market. Since 2025, the volatility of Bitcoin and Ethereum has sharply decreased, and the market has shifted from a "roller coaster" to "flat ground," causing both institutions and retail investors to lose the impulse to trade frequently.

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

The launch of ETFs has directly rewritten the paths for investors. Following Bitcoin, Ethereum, Solana, and XRP have all applied for ETFs, which were originally Coinbase's core trading assets. Compared to the 0.5% trading fees of CEX, the annual management fees of ETFs at 0.1%–0.5% seem much cheaper, naturally leading funds to flow toward Wall Street.

At the same time, the wealth creation effect on-chain has kept more users on-chain.

The craze for memes and DeFi has led native investors to form new habits: CEX is no longer a trading venue but merely a "cross-chain bridge for deposits and withdrawals" and a "temporary wallet for stablecoins." The rise of decentralized derivatives has further accelerated the outflow of funds. New platforms like Hyperliquid, with flexible listing mechanisms, higher leverage, and more extreme experiences, have quickly attracted traders from regions with strict regulations like the U.S. In the eyes of these users, Coinbase's "rule-following" has become a constraint.

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

Robinhood announced a full-scale entry into crypto, targeting Coinbase's most valuable young retail investor demographic. For them, the interface provided by Robinhood is more familiar, the fees are lower, and the one-stop experience for U.S. stocks and crypto is more convenient. For large funds, the "brokerage halo" of Robinhood is even more attractive than Coinbase.

This multiple pressure was starkly magnified in Coinbase's Q2 2025 financial report. Coinbase disclosed that total revenue for the quarter was approximately $1.5 billion, a 26% decrease from the previous quarter; the GAAP net profit reached $1.4 billion, which looks impressive at first glance, but most of it came from Circle's investments and paper gains from crypto asset holdings. Once these one-time factors are excluded, the adjusted net profit is only $33 million. More critically, the core spot trading revenue was only $764 million, a year-on-year decline of 39%.

The financials look lively, but the reality is bleak. Coinbase's profits no longer rely on trading but on sharing in the profits from stablecoins to stay afloat. This is a brutal report card, and it may also signal the end of a golden era.

When Trading Platforms No Longer Rely on Trading Business

In the face of difficulties, Coinbase has proposed 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 create the Everything Exchange.

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

Armstrong specifically mentioned the current state of U.S. stocks: today, if an Argentine wants to open a U.S. brokerage account, they face a very high wealth threshold. For ordinary investors in most countries, U.S. securities are almost a "rich person's exclusive market."

But if stocks are tokenized and moved on-chain, it can break this barrier, allowing anyone in the world to buy and sell U.S. assets at any time.

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

In his vision, Coinbase is no longer just a platform for matching trades but an "Everything Exchange" that handles all assets on-chain—a financial operating system that is open, inclusive, and operates around the clock.

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

The first three serve the Base chain: Spindl provides an on-chain advertising stack, allowing developers to directly acquire users; Iron Fish brings a zero-knowledge proof team to build privacy modules on Base; Liquifi offers token management and compliance services and plans to integrate with Coinbase Prime to facilitate institutional and RWA projects. Together, these three have lowered the barriers for developers on Base and created a complete tool stack.

The most significant acquisition is Deribit. Futures trading is more stable and profitable than spot trading, but Coinbase has long been constrained by U.S. regulations and has been absent for a while. Spending $2.9 billion to acquire Deribit allows it to gain a leading share in the options market and a large institutional client base. Less than a month after the acquisition was completed, Coinbase launched perpetual contracts under CFTC regulation, effectively "seamlessly taking over" Deribit's capabilities.

If the acquisition is a violent breakthrough for Coinbase against the ceiling of trading revenue, then the ongoing business expansion represents a deeper identity transformation.

It is focusing on "heavy lifting" areas: stablecoins, wallets, public chains, and institutional services. These seemingly basic pieces are sketching out a new Coinbase—not just a trading platform, but a Web3 version of Apple + Visa + AWS.

The first step is stablecoins.

……

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