Coinbase says stocks beat crypto after earnings gave investors somewhere else to go
Stocks have crushed crypto since the October 2025 selloff, and the big exchanges seem to know it. Coinbase says the S&P 500 is up 17% since that crash. The broader crypto market is down 47.5%. My take: there is no neat way to spin that.
A lot of money has left crypto. Coinbase’s Q4 2025 earnings report showed $1.78 billion in revenue, down 22% from the same quarter a year earlier, mostly because people traded less. About $2.03 trillion has come out of the crypto market since October 2025. By February 2026, total crypto market cap was near $2.24 trillion. That is the hard part.
This does not look like investors gave up on risk altogether. The S&P 500 gained 17% after October 2025 while crypto fell 47.5% over the same period. Investors did not just hide in cash. They picked stocks over tokens. Why does this matter? Because strong earnings gave them somewhere else to go, while crypto lost some of the pull that had kept exchanges, altcoins, high beta tokens, and perpetual traders busy.
Coinbase is trying to rely less on crypto trading fees. In early 2026, Coinbase launched commission free stock and ETF trading for US users inside its app through a partnership with Yahoo Finance. Most crypto-purity arguments say exchanges should stay in their lane. That’s only half right. If crypto volume dries up, Coinbase still wants access to the money moving into equities.
Kraken is going another way: stock exposure in a crypto-style wrapper. On February 24, 2026, Kraken launched what it called the world’s first regulated tokenized equity perpetual futures. The product is available in more than 110 countries and offers up to 20x leverage. Traders can use the perpetual futures format they already know. The exposure, though, comes from equities.
That is awkward for anyone who still wants crypto exchanges to be only about crypto. Tokenized US equities and perpetual products use blockchain rails, yes. But they also concede the obvious: BTC, ETH, and altcoin trading alone did not keep activity strong after October 2025. I’ll be honest: the wrapper matters less than the migration of attention. Coinbase and Kraken are betting users care about 24/7 access, faster settlement, leverage, and one-app execution, even when the thing being traded is a stock or ETF.
Regulation is steering this too. Kraken called its February 24, 2026 product regulated. Coinbase is adding stock and ETF trading for US users instead of simply piling on more crypto risk. Counter to the usual advice, this is not just a growth story. It is also a defensive move after a 47.5% crypto market drop and $2.03 trillion in outflows. Exchanges need revenue that can stand up to more scrutiny and still appeal to people who already know equities.
Crypto exchanges are now running into traditional brokerages more directly. Coinbase and Kraken are no longer competing only with Binance, OKX, or each other. They are moving closer to firms like Fidelity and Interactive Brokers. Crypto exchanges have 24/7 trading and blockchain settlement. Traditional brokers have trust, scale, retirement-account distribution, and decades of equities experience. Coinbase’s $1.78 billion in Q4 2025 revenue shows why that overlap matters.
What this means
Since October 2025, stocks have done better than crypto, and exchanges are adjusting around that fact. The S&P 500 is up 17%. The broader crypto market is down 47.5%. Big gap. Coinbase’s 22% revenue decline in Q4 2025 shows how quickly weaker trading volume hits the business. The $2.24 trillion crypto market cap level from February 2026 is worth watching. Is that just a chart level? No. A move above it would suggest some recovery. If crypto cannot hold that area, exchange revenue probably stays under pressure.
The next test is whether Coinbase’s stock and ETF product works, and whether Kraken’s tokenized equity perpetuals attract more than the usual crypto crowd. Coinbase needs its early 2026 rollout to reduce its dependence on crypto volume. Kraken needs its February 24, 2026 product to prove equity-linked perpetuals are not just a niche trade. Yes, this slightly contradicts the old crypto-exchange pitch of staying native to BTC and ETH. Bear with me: the business incentive has changed. For BTC and ETH, the risk is indirect but real. If equity products inside crypto apps pull attention away from spot crypto, liquidity may stay split even if total market cap recovers. For now, $2.24 trillion is the level to watch, and February 24, 2026 is the date Kraken made this fight much more direct.