Coinbase threatened by bitcoin ETFs after almost 400% surge in stock last year
Brian Armstrong, chief executive officer of Coinbase Global Inc., speaks during the Messari Mainnet summit in New York, on Thursday, Sept. 21, 2023.
Michael Nagle | Bloomberg | Getty Images
Now that the SEC has approved the creation of bitcoin exchange-traded funds, Coinbase’s position in the crypto market is poised to take a dramatic turn.
In the weeks ahead, Coinbase will help shepherd some of the biggest names in asset management, including BlackRock, Franklin Templeton, and WisdomTree, into the digital asset ecosystem as their custodial partner of choice. That means Coinbase will be central to the storage and safekeeping of the assets for those firms.
While custody revenue presents a big growth opportunity for Coinbase in the near term, some industry analysts are concerned that the company’s core transaction business is at risk due to the myriad ways investors will be able to access bitcoin. Instead of having to go to an asset exchange such as Kraken, Binance, or Coinbase, they’ll be able to invest in the digital currency through the same mechanism they already use to buy stock and bond ETFs.
In a report Dec. 4, analysts at Bernstein predicted that in less than five years, 10% of the global supply of the world’s largest cryptocurrency, or roughly $300 billion, will be managed by ETFs. The firm called it the “largest pipe ever built between traditional financial markets and crypto financial markets.”
In 2023, Coinbase’s stock was one of the top performers in the tech industry, soaring almost 400%. Much of that rally was tied to bitcoin, which increased 150%. But part of the outperformance relative to bitcoin was due to the excitement that new ETFs would drive more interest in crypto and be a boon for Coinbase.
“ETFs should expand the pie and bring new people and institutions into the cryptoeconomy,” Coinbase Chief Operating Officer Emilie Choi said on the company’s most recent earnings call in November. “They should add credibility to the market, and we should see increased liquidity and market stability as we’ve seen with other asset classes such as gold.”
From June 15, the day that BlackRock — with its $9 trillion in assets under management — filed for a so-called spot bitcoin ETF and named Coinbase its crypto custodian, shares in the exchange rose from around $54 to over $170 by the end of the year.
JPMorgan analysts wrote in a November report that Coinbase would be a key beneficiary of the coming ETF boom, given the immediate upside of custody fees from asset managers.
“We estimate Bitcoin custody and surveillance revenue will more than offset decline in Bitcoin trading volume as assets migrate to ETFs,” the analysts said.
Some of the momentum on Wall Street has faded to start 2024, with the stock down 14% since the calendar turned. According to Mizuho analysts, there could be more pain to come.
“With the hype around Bitcoin ETFs likely to reach a climax in the coming weeks, COIN bulls could experience a rough awakening when they realize how minimal the revenue impact is,” Mizuho wrote in a note Thursday.
Mizuho’s analysts have the equivalent of a sell rating on the stock and were bearish throughout last year’s rally, finishing 2023 with a $54 price target, by far the lowest among analysts tracked by FactSet.
The battle for market share
Almost half of Coinbase’s revenue comes from the fees it charges on transactions, meaning the company needs people to keep using the exchange to buy and trade bitcoin and other digital currencies.
In the third quarter in 2023, total transaction revenue accounted for 46% of net revenue. However, Coinbase has been diversifying into new businesses. In 2022, transactions made up closer to 75% of revenue.
More than one-quarter of Coinbase’s revenue in the third quarter came from interest income on the exchange’s stablecoin reserves, including Circle’s U.S. dollar-pegged USDC coin. Stablecoin revenue more than doubled from a year earlier primarily due to rising interest rates.
“A few years ago, our business at Coinbase was 95% trading fees, and we made a big effort around the time it went public to start diversifying our revenue,” CEO Brian Armstrong told CNBC in a recent interview. “What’s great is that now we have multiple sources of revenue — some of them in a high interest rate environment go up, some of them in a low interest rate environment go up.”
Still, transaction fees remain a key income driver for the exchange. And unlike trading platform Robinhood, which enables investments in a wide array of asset types, Coinbase doesn’t allow for trading of ETFs.
“Spot bitcoin ETFs appear poised to take volume away from crypto exchanges,” said Bryan Armour, director of passive strategies research for North America at Morningstar.
JPMorgan anticipates that new account growth will slow as “novice crypto investors get their initial exposure and possibly final exposure through ETFs rather than Coinbase,” adding that many of these neophyte traders will never go beyond bitcoin, “thus never needing the services of a Coinbase.”
Mizuho sees the income from custody fees as fairly modest given how far investors have pushed up the stock. The firm predicts ETF approval may add just $25 million to $30 million in annual custody fees, with another $200 million to $210 million of new revenue “if incremental Bitcoin inflows generate additional spot trading opportunities.”
With a collective gain of up to $240 million in additional annual revenue, “this represents just mid-to-high single-digit percentage upside vs. current 2024 consensus,” the Mizuho analysts wrote. They said they “do not believe the nearly 400% increase in the stock in anticipation of ETF approval justifies our reasonable estimate for the ETFs’ actual contribution to revenue.”
A Coinbase spokesperson told CNBC in an emailed statement that, in addition to custody fees, the company will make money by providing services such as agency trading, matching and settlement, and financing to ETF issuers.
“The platform believes that spot ETFs will be a positive catalyst for the entire crypto space, adding credibility, increasing liquidity, and bringing new participants and institutions into the cryptoeconomy,” the spokesperson said, reiterating prior comments from Coinbase executives.
Competition could also create pricing pressure.
ARK, Invesco, Fidelity, WisdomTree, and Valkyrie are all offering deals that involve fee-free trading for a certain period of time. Others are opting for discounted fees.
Coinbase’s transaction fee varies, with a max of 0.6% on transactions up to $10,000 in value. In the company’s most recent quarterly earnings call, Choi said that Coinbase doesn’t plan to reduce transaction fees to make them more competitive with other platforms where ETFs are being traded at significantly lower prices.
The transaction charges on Coinbase also vary between its Pro platform and the retail app, where fees are higher. For retail transactions up to $1,000, the fee ranges from 1.5% to 3%.
However, JPMorgan analysts said greater efficiency and transparency in equity markets, paired with lower costs to execute, could drive more cryptocurrency trading to ETFs over time, which could ultimately “pressure Coinbase to lower commissions and to narrow trading spreads, reversing the multi-quarter increase we’ve witnessed in Coinbase’s retail revenue capture.”
Still, Coinbase has its believers among crypto enthusiasts, such as Nic Carter, a partner at Castle Island Ventures.
“They are essential infrastructure in terms of custody, trading, and surveillance for the majority of the ETF proposals,” Carter said. “Even though it might affect their fees at the margin I think they are still winners here.”
WATCH: Former SEC Chair Jay Clayton on changes in bitcoin trading
Japanese equipment giant Kubota brought 22 new or updated machines to the 2025 bauma expo earlier this year, but tucked away in the corners was a new retrofit kit that can help existing customers decarbonize more quickly, and more affordably.
No matter how badly a fleet may want to electrify, harsh economic realities and the greater up-front costs typically associated with battery electric remain high hurdles to overcome, but new retrofit options from major manufacturers are popping up to help lower those obstacles.
The latest equipment maker to put its name on the retrofit list is Kubota, who says its kit can be installed by a trained dealer in a single day.
That’s right! By this time tomorrow, your diesel-powered Kubota KX019 or U27-4 excavator (shown) could be fitted with an 18 or 20 kWh li-ion battery pack and electric drive motors and ready to get to work in a low-noise or low-vibration work environment where emissions are a strict no-no. Think indoor precision demolition or historic archeological excavation.
Then, if necessary, it can go right back to diesel power.
From diesel to electric and back again
If that sounds familiar, that’s because we’ve talked about a similarly flexible power solution from ZQUIP. The battery packs and diesel engines are much larger in that application, but the basic sales pitch remains the same: electric when it benefits your operation, diesel it doesn’t.
Kubota says its modular retrofit kits is a response to the increasing global demand for sustainable alternatives by focusing on making machinery that’s flexible and repairable enough to be “reusable,” and offer construction fleet managers a longer operational lifespan, superior ROI (return on investment), and lower TCO (total cost of ownership) than the competition.
Kubota’s solution also notably reduces maintenance costs and operational overheads. With no engine and associated components, servicing time and expenses are considerably reduced, saving customers both time and money. Additionally, with electricity costing far less than fossil fuels, it offers a highly economical advantage.
International Rental News reports that other changes to the excavators include a more modern cab controls with a digital instrument cluster, a 60 mm wider undercarriage for more stability, and an independent travel circuit allows operators to use the boom, dipper, bucket, and auxiliary functions without an impact on tracking performance.
Kubota’s new kit, first shown at last year’s Hillhead exhibition in the UK, will officially be on sale this summer – any day now, in fact – though pricing has yet to be announced.
Electrek’s Take
If you’re wondering how it is that we’re still talking about bauma 2025 a full quarter after the show wrapped up, then I haven’t done a good enough job of explaining how positively massive the show was. Check out this Quick Charge episode (above) then let us know what you think of Kubota’s modular power kits in the comments.
SOURCE | IMAGES: Kubota, via International Rental News.
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Elon Musk isn’t happy about Trump passing the Big Beautiful Bill and killing off the $7,500 EV tax credit – but there’s a lot more bad news for Tesla baked into the BBB. We’ve got all that and more on today’s budget-busting episode of Quick Charge!
We also present ongoing coverage of the 2025 Electrek Formula Sun Grand Prix and dive into some two wheeled reports on the new electric Honda Ruckus e:Zoomer, the latest BMW electric two-wheeler, and more!
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Environment
FERC: Solar + wind made up 96% of new US power generating capacity in first third of 2025
Solar and wind accounted for almost 96% of new US electrical generating capacity added in the first third of 2025. In April, solar provided 87% of new capacity, making it the 20th consecutive month solar has taken the lead, according to data belatedly posted on July 1 by the Federal Energy Regulatory Commission (FERC) and reviewed by the SUN DAY Campaign.
Solar’s new generating capacity in April 2025 and YTD
In its latest monthly “Energy Infrastructure Update” report (with data through April 30, 2025), FERC says 50 “units” of solar totaling 2,284 megawatts (MW) were placed into service in April, accounting for 86.7% of all new generating capacity added during the month.
In addition, the 9,451 MW of solar added during the first four months of 2025 was 77.7% of the new generation placed into service.
Solar has now been the largest source of new generating capacity added each month for 20 consecutive months, from September 2023 to April 2025.
Solar + wind were >95% of new capacity in 1st third of 2025
Between January and April 2025, new wind provided 2,183 MW of capacity additions, accounting for 18.0% of new additions in the first third.
In the same period, the combination of solar and wind was 95.7% of new capacity while natural gas (511 MW) provided just 4.2%; the remaining 0.1% came from oil (11 MW).
Solar + wind are >22% of US utility-scale generating capacity
The installed capacities of solar (11.0%) and wind (11.8%) are now each more than a tenth of the US total. Together, they make up almost one-fourth (22.8%) of the US’s total available installed utility-scale generating capacity.
Moreover, at least 25-30% of US solar capacity is in small-scale (e.g., rooftop) systems that are not reflected in FERC’s data. Including that additional solar capacity would bring the share provided by solar + wind to more than a quarter of the US total.
With the inclusion of hydropower (7.7%), biomass (1.1%), and geothermal (0.3%), renewables currently claim a 31.8% share of total US utility-scale generating capacity. If small-scale solar capacity is included, renewables are now about one-third of total US generating capacity.
Solar is on track to become No. 2 source of US generating capacity
FERC reports that net “high probability” additions of solar between May 2025 and April 2028 total 90,158 MW – an amount almost four times the forecast net “high probability” additions for wind (22,793 MW), the second-fastest growing resource. Notably, both three-year projections are higher than those provided just a month earlier.
FERC also foresees net growth for hydropower (596 MW) and geothermal (92 MW) but a decrease of 123 MW in biomass capacity.
Taken together, the net new “high probability” capacity additions by all renewable energy sources over the next three years – i.e., the bulk of the Trump administration’s remaining time in office – would total 113,516 MW.
FERC doesn’t include any nuclear capacity in its three-year forecast, while coal and oil are projected to contract by 24,373 MW and 1,915 MW, respectively. Natural gas capacity would expand by 5,730 MW.
Thus, adjusting for the different capacity factors of gas (59.7%), wind (34.3%), and utility-scale solar (23.4%), electricity generated by the projected new solar capacity to be added in the coming three years should be at least six times greater than that produced by the new natural gas capacity, while the electrical output by new wind capacity would be more than double that by gas.
If FERC’s current “high probability” additions materialize, by May 1, 2028, solar will account for one-sixth (16.6%) of US installed utility-scale generating capacity. Wind would provide an additional one-eighth (12.6%) of the total. That would make each greater than coal (12.2%) and substantially more than nuclear power or hydropower (7.3% and 7.2%, respectively).
In fact, assuming current growth rates continue, the installed capacity of utility-scale solar is likely to surpass that of either coal or wind within two years, placing solar in second place for installed generating capacity, behind only natural gas.
Renewables + small-scale solar may overtake natural gas within 3 years
The mix of all utility-scale (ie, >1 MW) renewables is now adding about two percentage points each year to its share of generating capacity. At that pace, by May 1, 2028, renewables would account for 37.7% of total available installed utility-scale generating capacity – rapidly approaching that of natural gas (40.1%). Solar and wind would constitute more than three-quarters of installed renewable energy capacity. If those trend lines continue, utility-scale renewable energy capacity should surpass that of natural gas in 2029 or sooner.
However, as noted, FERC’s data do not account for the capacity of small-scale solar systems. If that’s factored in, within three years, total US solar capacity could exceed 300 GW. In turn, the mix of all renewables would then be about 40% of total installed capacity while the share of natural gas would drop to about 38%.
Moreover, FERC reports that there may actually be as much as 224,426 MW of net new solar additions in the current three-year pipeline in addition to 69,530 MW of new wind, 9,072 MW of new hydropower, 202 MW of new geothermal, and 39 MW of new biomass. By contrast, net new natural gas capacity potentially in the three-year pipeline totals just 26,818 MW. Consequently, renewables’ share could be even greater by mid-spring 2028.
“The Trump Administration’s ‘Big, Beautiful Bill’ … poses a clear threat to solar and wind in the years to come,” noted the SUN DAY Campaign’s executive director, Ken Bossong. “Nonetheless, FERC’s latest data and forecasts suggest cleaner and lower-cost renewable energy sources may still dominate and surpass nuclear power, coal, and natural gas.”
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