David Edwards
Coinbase Global Inc. reported a 10% decline in total revenue for the first quarter of 2025, falling to $2 billion and missing Wall Street estimates by 4.1%, as slowing market conditions weighed on trading activity. Despite the revenue shortfall, the cryptocurrency exchange managed to surpass earnings expectations, posting earnings per share (EPS) of $1.94 versus the Zacks Consensus Estimate of $1.85.
Revenue Pressures and Crypto-Linked Losses Hit Net Income
The firm’s net income plunged 95% quarter-over-quarter to $66 million, down from a near-record $1.29 billion in Q4 2024. The sharp decline was primarily driven by a $596 million unrealized loss on Coinbase’s crypto holdings amid a broad market contraction.
Transaction revenue, the company’s largest segment, declined 18.9% from the previous quarter to $1.26 billion, in line with a 10.5% drop in trading volumes to $393 billion. The crypto market cap shrank significantly during the quarter, partly attributed to renewed macroeconomic headwinds, including tariff policies implemented by the Trump administration.
Growth in Subscriptions and Global Market Share
Offsetting some of the losses, Coinbase’s subscription and services revenue increased 8.9% to $698.1 million, led by gains in stablecoin-related products. The firm also noted an increase in its global spot and derivatives market share, supported by regulatory advancements and strategic expansions in high-growth regions like Argentina and India.
On the legal front, Coinbase hailed the dismissal of its lawsuit with the U.S. Securities and Exchange Commission as a landmark victory for regulatory clarity and innovation in the crypto space.
Deribit Acquisition Signals Strategic Pivot
In a parallel development, Coinbase announced the acquisition of crypto derivatives platform Deribit for $2.9 billion—the largest M&A transaction in the history of the crypto sector. The acquisition, disclosed on May 8, significantly boosts Coinbase’s exposure to the crypto derivatives market, a segment previously limited to its operations in Bermuda.
Deribit processed over $1 trillion in trading volume during 2024 and currently maintains approximately $30 billion in open interest, underscoring the strategic significance of the deal.
