However, institutional transaction revenue saw a decline of 13% quarter-over-quarter, totaling $55.3 million.

The company believes that a more mainstream crypto market, supported by favorable regulations, could enhance its growth prospects as the new U.S. Congress is expected to back the crypto industry.

Coinbase's Base network has emerged as the leading layer two network, boasting over $2.5 billion in total value locked and a 55% increase in transactions last quarter.

As the largest cryptocurrency exchange in the U.S., Coinbase's performance remains closely tied to the price movements of Bitcoin and Ethereum, with analysts watching its recovery closely.

Coinbase's third-quarter earnings fell short of expectations, reporting $0.28 per share and $1.21 billion in revenue, compared to projections of $0.41 EPS and $1.26 billion.

To diversify revenue streams and reduce reliance on trading volume, Coinbase is enhancing its custody offerings and exploring the tokenization of real-world assets.

In a strategic move, Coinbase announced a $1 billion stock buyback program, supported by a $400 million increase in its balance sheet, which now shows $8.2 billion in cash resources.

October has been a strong month for crypto inflows, with global funds seeing nearly $3.4 billion in total, marking one of the largest months for the sector.

Despite facing challenges, Coinbase continues to grow its recurring revenue streams, such as staking and custody services, which are crucial in a volatile market.

Despite the earnings miss, total transaction revenue surged to $572.5 million, reflecting a remarkable 98% year-over-year increase.

Looking ahead, Coinbase is advocating for clearer cryptocurrency regulations, especially in light of the upcoming 2024 elections, which could bolster its operational capabilities.

Management expressed optimism for the fourth quarter, especially as Bitcoin prices approach their all-time high of nearly $74,000.