San Francisco, California — Coinbase, the leading cryptocurrency exchange in the United States, reported disappointing first-quarter earnings that fell short of analysts’ expectations, impacting share prices. The financial data for the quarter ending March 31 indicated a significant decrease in net profits, alongside a notable growth in transaction revenue from stablecoins.
In the first quarter, Coinbase generated revenue of $65.6 million, translating to 24 cents per share. This marks a stark decline compared to $1.18 billion, or $4.40 per share, during the same period last year. After excluding the influence of cryptocurrency investments, the company’s adjusted earnings amounted to $527 million, or $1.94 per share.
Total revenue hit $2.03 billion, an increase from $1.64 billion year-over-year, but this figure lagged behind the $2.12 billion anticipated by analysts. Transactional revenue accounted for $1.26 billion of this total, while income from subscriptions and services reached $698.1 million.
Despite the growth in stablecoin transactions, Coinbase’s consumer trading volume plummeted 17% from the previous quarter to $78.1 billion. This reduction in activity followed a period of heightened trading linked to the election of former President Donald Trump, whose win had initially fueled optimism for a more favorable regulatory landscape for cryptocurrencies. Institutional trading also declined, falling 9% to $315 billion for the same timeframe.
The first quarter included pivotal moments for the cryptocurrency market, featuring an all-time high for Bitcoin on January 20. Nonetheless, volatility stemming from uncertainties related to Trump’s tariffs injected a sense of caution among investors for riskier assets, including digital currencies. In April alone, Coinbase reported generating around $240 million in transaction revenue.
Looking ahead to the second quarter, the company forecasts subscription and service revenue to range between $600 million and $680 million. However, they caution that ongoing stablecoin revenue growth may be offset by diminished blockchain rewards in light of declining asset prices.
In another significant move announced earlier, Coinbase revealed plans to acquire Deribit, a Dubai-based crypto derivatives exchange, for $2.9 billion. This acquisition is set to be the largest in the cryptocurrency sector to date, and it is expected to help Coinbase expand its presence beyond U.S. borders.
During the recent trading session, Coinbase’s stock saw a 5% increase, but the overall year-to-date performance remained lackluster, with shares down nearly 17%. As the company navigates a fluctuating market landscape, its derivatives business continues to gain market share, suggesting potential for future recovery as it adapts to evolving industry dynamics.