Coinbase poised to gain from Wall Street’s adoption of tokenization

Published: Friday, October 31, 2025 · 4:45 PM  |  Updated: Friday, October 31, 2025 · 4:45 PM

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00:00 Speaker A

I think of Coinbase as mostly a consumer-facing or retail-facing organization, but I guess increasingly that’s not the case.

00:05 Speaker B

Yeah, so on the trading side, um the majority of volumes actually come from derivatives. So options and and futures. And that’s been an area that Coinbase has really accelerated growth over the last year and then this derivate exchange kind of step function that as well. So, uh they’re they’re absolutely leaning in there and then building really the infrastructure around that. So that’s, you know, lending and custody and other things that institutions are going to demand.

00:30 Speaker B

And so, I think they’re really well set up to participate in that. But then, you know, more broadly, you know, this this theme of bringing other companies on chain, whether it’s through stable coins or I think the big story or the biggest story with Coinbase is the everything exchange, where really using the plumbing of digital assets to bring other asset classes on chain. So it’s everything crypto, but then every other asset’s going to get tokenized over the long term and Coinbase is going to be in the middle of all that.

01:05 Speaker B

So, traditional financial services is coming towards crypto and I think Coinbase is really well positioned for that thing.

01:13 Speaker A

Interesting. So the tokenize tokenization of everything can sit on Coinbase and that’s where it can eventually be traded.

01:18 Speaker B

Exactly. and that’s that’s where we’re we’re literally at the starting line of that. um and we’re waiting for we just got the Genius Act passage which is unlocking stable coins, but the clarity Act, which is either late this year or early next year is going to ignite this theme of tokenizing everything.

01:35 Speaker B

And that to me is like, that’s why you look at Coinbase today and and buy the stock. And uh they’re just uniquely positioned to be able to execute on that because of their history in the space. And this is a really technical space that people can’t just build or bring a few engineers in to get into.

01:53 Speaker A

Well, to that point too though, um I was reading a little an other analyst commentary that talked about costs ticking up as a result of this, that they’re investing in all of this. So what does that going to mean for investors going forward?

02:08 Speaker B

Yeah, so that’s the great question because we’re in this tough balance right now of like there’s so much growth ahead, there’s so many areas and you want to maintain that lead, but at the same time investors demand uh, some operating leverage here as well. They are showing operating leverage and actually they talked about last night.

02:22 Speaker B

They’ve had really big headcount growth in 2025. They’re going to absorb some of that into 2026. So I think next year, as a lot of these growth initiatives kick in, as you’re kind of flattening out on headcount growth, that should be good for costs. So that’s one point. Then the other piece is, you know, M&A and using M&A as a tool here to kind of accelerate growth.

02:37 Speaker B

There’s rumors of some additional acquisitions that they’re looking at. And I think that’s going to be another big tool for them to drive growth but then also integrate these companies and get some operating leverage as well.

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