Coinbase, the leading US cryptocurrency exchange, is confronting growing competitive pressures as former President Donald Trump's crypto-friendly policies attract major financial institutions and new platforms to the market. Under the Trump administration, regulatory changes including a landmark stablecoin bill have created favorable conditions for Wall Street's entry into crypto, potentially bringing billions in institutional capital.
Coinbase's market share is shrinking as well-funded competitors emerge, particularly from Asia, and traditional financial giants like State Street and BNY Mellon consider entering the custody space. Ryan Rasmussen of Bitwise Asset Management noted: "There's this fear that Coinbase had a head start and it's losing that head start." Mark Palmer of The Benchmark Company added that new regulations provide a "green light for new competitors to come in."
The company is responding by diversifying beyond trading into banking, asset management, and derivatives. Coinbase has acquired crypto derivatives platform Deribit for $2.9 billion and partners with JPMorgan and PNC Bank to bridge traditional and crypto finance. The company also continues accumulating Bitcoin, purchasing 2,509 BTC in Q2 2025 for approximately $222 million, bringing its total holdings to 11,776 BTC.
Despite these efforts, Coinbase remains heavily exposed to Bitcoin price volatility, with trading fees still constituting the core of its revenue. The company's stock dropped 15% after disappointing Q2 earnings, signaling investor caution about its ability to maintain dominance in an increasingly crowded market.