A：Coinbase's Q1 results included a revenue of $2 billion and $930 million in adjusted EBITDA.

A：Coinbase exists to increase economic freedom in the world by updating the financial system with cryptocurrency, which the company views as a technology that can create economic freedom for people globally.

A：Serving multiple customer groups such as businesses, institutions, and developers can create synergies by driving volume on the exchange and fostering economic activity, leading to more liquidity and order flow.

A：Key product updates in Q1 included the acquisition of Derivative, the world's leading crypto options exchange, to build out a comprehensive trading platform; the launch of Portfolio Portfolio Margin 2.0 to expand access to long and short capabilities for institutional traders; the growth of USDC as a stablecoin with a record market cap of $60 billion; and the acceleration of international expansion with new licenses secured in Argentina and registration with India's financial intelligence unit.

A：Coinbase is driving utility for the next wave of crypto adoption by expanding its stablecoin payments business, launching on-chain lending products, such as Bitcoin-backed USDC borrowing, and acquiring companies that enhance the utility of the blockchain, like an on-chain ad platform and a company for private transactions.

A：The dismissal of the SEC lawsuit against Coinbase marked a major judicial win for innovation-friendly regulation, which is important for protecting customers' rights and is considered a significant milestone for the entire crypto industry.

A：Coinbase is building better financial infrastructure for the world, which aims to enable more economic freedom. Coinbase has been focused on crypto since its inception 12 years ago and continues to execute rapidly with growing regulatory clarity. The belief is that crypto rails are poised to power an increasing share of global GDP and to update every aspect of the financial system over time.

A：In Q1, Coinbase reported transaction revenue of $1.3 billion, down 19% from the previous quarter. The company grew its trading market share across spot and derivatives trading. The discrepancy between the revenue decline and the volume decline was due to two factors: the growth in the derivatives trading business leading to a decline in transaction revenue from derivatives and a spot volume mix shift that favored market makers and liquidity providers with lower fee rates.

A：Subscription and services revenue grew 9% to $698 million in Q1. In Q2, the company expects subscription and services revenue to be between $600 and $680 million, with stablecoin revenue growth being a main driver. However, the sequential decline is expected due to the down prices of Ethereum and Solana, which affect blockchain rewards and other subscription and services revenue lines.

A：The acquisition of Dera bit is expected to close by the end of the year and enhance Coinbase's profitability immediately upon closing. The deal is expected to add diversity and durability to trading revenues. Dera bit's consistent track record of generating positive adjusted EBITDA is anticipated to grow as part of the combined entity, and they are a leader in options with a significant global market share.

A：Coinbase's board has authorized a $1 billion share repurchase program without an expiration date, which is an opportunistic way to reduce the overall number of shares. In the first quarter, the company used $100 million from its balance sheet to reduce the number of shares by withholding about 390 million restricted stock units (RSUs) from being issued to employees, along with paying the taxes on those shares. The company balances share repurchases with other uses of cash and aims to manage the overall number of shares through various business activities.

A：The company allocates a percentage of its net income to strategic investments in crypto assets, specifically Bitcoin. This quarter, they invested about $150 million in new crypto investments, with the fair market value of their investment portfolio being $1.3 billion or 25% of their net cash.

A：The company views the entry of new retail entities into the crypto space as a positive, as it expands the total addressable market (TAM). They are confident that this will offset pressure from competition and welcome the industry growth.

A：Coinbase's strategic advantages include being 100% focused on crypto, having solved difficult problems in crypto infrastructure like secure custody, integrating various blockchains, and building an exchange with a network of banks. They also offer infrastructure services to new entrants in the crypto space, capturing a part of the value chain.

A：New opportunities include perpetual futures in the U.S., availability of millions of assets for trading on the platform via decentralized exchanges, tokenizing securities and other asset classes, and rethinking capital formation entirely on-chain.

A：The acquisition of Deribit is expected to enhance profitability and strengthen Coinbase's existing franchise. Deribit's business is expected to grow, increasing market share within options and enhancing the profitability of Coinbase's derivatives franchise. The acquisition is also accretive, as Deribit has a history of positive adjusted EBITDA.

A：Binance's addition to the USDC partnership increases the reserve income available to Coinbase, as it provides 100% of the underlying reserve income for all USDC held in Coinbase's eligible products. The partnership also allows for sharing of off-platform economics, which is believed to grow the overall USDC market cap and is beneficial for the ecosystem.

A：USDC is the only major stablecoin in Europe that complies with Mica legislation, which makes it unique and potentially advantageous in that market.

A：Coinbase views the integration of traditional banks into the crypto industry as a positive catalyst, with various banks planning to integrate crypto and seek solutions like custodial services and stablecoins. Coinbase has had conversations with numerous banks, signed deals, and plans to offer 'crypto as a service' to institutional clients.

A：Coinbase's vision for the future is to become the number one financial services app in the world, serving retail, small and medium businesses, institutions, and developers. It plans to achieve this by continuing to innovate and stay at the forefront of the crypto industry.

A：Coinbase is focused on the future of integrating traditional financial assets onto the blockchain, including money market funds, real estate, and securities. They see these asset classes coming on-chain and have made product updates reflecting this vision.

A：In the event of an acquisition, Coinbase's contracts would persist and there would be no change to their commercial arrangements.

A：Coinbase's strategy for being a 'crypto as a service' provider does not necessitate a banking license based on current legislation drafts they've seen. They do not have plans for such a license unless it becomes necessary in the future, which they consider unlikely at this point.

A：Not having a bank charter is said to limit product velocity, which is an advantage in this context.

A：The speaker attributes the lack of meaningful market share for other exchanges to the fact that the crypto options market is nascent, and players who built product expertise were able to capture the majority of the market share, notably with the entity referred to as 'Debit'.

A：The users of crypto options, referred to as 'prosumers', are advanced traders with a diverse institutional and retail customer base. They do not trade within the U.S.

A：The speaker believes that institutional traders see Coinbase as a trusted counterparty and would engage in trading if Coinbase had certain trading features. The addition of more products to trade could attract more trading volume.

A：Following the acquisition of Deribit, the go-to-market strategy for crypto derivatives in the U.S. involves engaging with large volume traders and offering new products. The strategy includes rebates and incentives to attract customers. The U.S. is currently listed as a restricted jurisdiction on the website, and regulatory considerations need to be addressed before products can be offered to U.S. customers. The speaker mentioned working closely with the CFTC to get perpetual futures live in the U.S.

A：The regulatory considerations include obtaining approvals for products like perpetual futures, which is a process that is ongoing with the CFTC. The speaker mentioned that one step closer to offering perpetual futures is the introduction of Bitcoin and Ethereum futures in the U.S.

A：The increase in monthly active users (MAUs) for USDC has doubled, leading to a substantial increase in revenue and a growth in customer engagement with products and services. The company has provided details on USDC rewards, revenues, and net margins, which are important financial indicators for the platform.

A：Paying rewards leads to increased customer engagement with products and services, resulting in nearly a 50% growth in balances. The average balance within the platform's products is now 12 billion, which is up 49% from the previous quarter. A significant number of customers have doubled their balances over the past two years, leading to more trading activity and engagement with other products and services.

A：Integrating USDC has led to a significant presence of 4 billion USDC on the platform, which is driving growth through the flywheel of distribution of USDC and building balances, in turn driving growth of the overall ecosystem.

A：Coinbase recently announced the largest crypto acquisition, which is a proof point of how M&A is used to add to their market leading institutional platform. It is expected to significantly accelerate the growth of their international footprint and their derivatives business.

A：Coinbase is in a strong position to take advantage of potential M&A opportunities and is always looking at great businesses to accelerate growth in key areas. The company is ready to take advantage of those opportunities in the coming years.

A：During a crypto market bear cycle, Coinbase's strategy remains flexible and robust. They plan their expense growth against potential熊 markets and are confident in their ability to invest in strategy, grow the employee base, products, and services, and navigate through a bear market without material changes to their strategy.