Expect Changes in Rewards and Fees at Crypto Exchanges as Strategies Shift

As the bear market persisted during the second quarter of this year, three of the largest listed crypto exchanges — Coinbase, Bullish, and Gemini — recorded a drop in trading revenue quarter-on-quarter. At the same time, Coinbase and Gemini are focusing more on relatively new products they want to grow, such as stablecoin products and prediction markets.

The gap between trading and non-trading revenues at these exchanges decreased in Q2. In Coinbase’s case, while trading revenue still dominates, the difference decreased from around $132 million to $44 million in a year. Similar trends were seen across the other exchanges too.

The change in market structure has affected the strategies that, in turn, directly affect users of these platforms.

More Rewards for Stablecoins and Prediction Markets

For example, Coinbase, which has been expanding its product portfolio, has been cutting its expenses, including a 14% staff cut in May, and cut full-year cost guidance by $100 million, but allowed its USD Coin (USDC) stablecoin rewards to grow in Q3. The company said average USDC held in Coinbase products jumped 44% in a year to $20 billion, claiming it captured around half of all USDC economics.

Meanwhile, while trading revenue went down, Gemini increased its focus on prediction markets, for example, by tripling the number of market makers this year, so the market always has someone to trade against. What’s more, the company started paying rebates to those firms and rewards to users of the prediction market. However, while the number of bets almost doubled in the quarter, Gemini received only 18% more revenue from this business ($524,000).

Supporting Trading and Improving Fee Economics

At the same time, the professional- and institution-focused Bullish exchange was trying to support its falling trading revenue with a new rewards program. The results? While adjusted transaction revenue dropped 21% in the quarter, the number ($29.9 million) was still 24% higher compared to Q2 2025. This is the only exchange out of the three discussed in this article that increased its trading revenue year over year. Bullish is also taking steps to expand its tokenized securities business.

Meanwhile, falling trading revenue does not necessarily mean worsening fee economics. For example, Gemini confirmed during its earnings call that “fee economics continued to improve in both retail and institutional trading segments” despite total exchange revenue ($12.5 million) dropping 27% over the quarter and 38% in a year. Trading volume on the exchange dropped 66% year-over-year, to $3.8 billion, while transaction revenue dropped “only” 38%. For Coinbase, it was worse: transaction revenue dived 22%, to $599 million, while spot volume fell 35% (to $146.4 billion), and derivatives climbed 3% (to $1,061 billion) in a year.

Blurring Lines and Increasing Competition

Should the crypto asset price rally sustain and end the bear market, this might mean a recovery in trading revenues at crypto exchanges as well. (The rally has already helped trim double-digit losses that shares of all three discussed exchanges registered this year.) However, as they’re trying to reduce their dependence on market fluctuations, users might expect more rewards and incentives for using new products. Meanwhile, when it comes to trading fees, for example, the picture is less clear, and a possible new bull market might encourage fee competition as platforms race for a bigger share in this lucrative yet volatile market.

These changes might also be supported by the blurring line between crypto asset and traditional finance platforms, as both worlds are starting to support each other’s products, increasing competition further. Hopefully, this will be beneficial for regular traders and investors too.