Coinbase Takes a Hit as Crypto Slumps, Posts Surprise First-Quarter Loss

Reuters, CNBC, Bloomberg, Investor’s Business Daily contributed to this report.

Coinbase had a rough start to the year.

The crypto exchange posted a surprise first-quarter loss of $1.49 per share, missing Wall Street’s expectation for a profit of 27 cents, according to LSEG. Revenue also came in short at $1.41 billion, below the $1.52 billion analysts were looking for.

The stock fell about 4% in after-hours trading.

The pain showed up where it usually does for Coinbase: trading. Spot volume got hit as crypto prices rolled over early in the year, and that dragged down transaction revenue, the company’s biggest money maker. Transaction revenue came in at $755.8 million, also below estimates.

Subscription and services revenue held up better, but not enough to offset the slide. That side of the business brought in $583.5 million, missing forecasts too. Coinbase is still trying to build that part of the company into something steadier, less tied to the mood swings of bitcoin and friends.

And those mood swings were ugly in the quarter. Bitcoin rose in March, but still finished the first three months of the year down 22%. When crypto prices fall, trading slows. Simple as that.

Coinbase is feeling the squeeze, but it is also trying to do something about it. The company keeps pushing into more than just plain-vanilla crypto trading, adding products like stablecoins, staking, derivatives and prediction markets. It even says its new prediction market business could hit $100 million in annualized revenue by year-end.

There are signs that strategy is working, at least a little. Stablecoin revenue climbed to $305 million, and derivatives trading volume jumped sharply. Coinbase also said it gained share in both spot and derivatives trading globally, hitting an all-time high of 8.6% of crypto trading volume market share.

Still, the larger story is clear: Coinbase is trying to become more than a place to trade bitcoin when prices are soaring. CEO Brian Armstrong’s “everything exchange” idea is basically a bet that users will stick around for other kinds of trading even when the crypto market cools off.

That may be the right long-term play. It is just not making the quarter look prettier right now.

Investors were also watching for clues on how lean Coinbase can stay as the market softens. The company said this week it will cut roughly 14% of its workforce, or about 700 jobs, as part of a restructuring push tied to AI and the crypto downturn.

For now, the message from Coinbase is pretty blunt: trading is still the engine, and when crypto weakens, the whole ride gets bumpier.