Coinbase Faces Revenue Decline in Q1, Citing Tariff Policy and Market Uncertainty as Key Factors
Coinbase (COIN) saw its stock drop nearly 3% in after-hours trading following the announcement of a weaker-than-expected first-quarter earnings report, as the crypto exchange grappled with declining crypto prices and macroeconomic pressures.
The exchange reported $2 billion in revenue, a decrease from the $2.27 billion recorded in Q4 and lower than Wall Street’s expectations of $2.1 billion. Coinbase also posted earnings per share (EPS) of $0.24, significantly missing the consensus estimate of $1.93, according to FactSet data.
Trading volume saw a 10% drop, settling at $393.1 billion quarter-over-quarter, with transaction revenue falling by 19% to $1.3 billion compared to Q4.
In its shareholder letter, Coinbase explained that, while the first quarter experienced heightened crypto asset volatility — with Bitcoin reaching a new all-time high in January — overall crypto prices fell in conjunction with broader market declines. These declines were driven by U.S. President Donald Trump’s tariff policy and ongoing macroeconomic uncertainty.
Leading up to the earnings report, analysts from J.P. Morgan, Barclays, and Compass Point had already downgraded their forecasts, anticipating a slowdown in crypto trading volume due to economic uncertainty.
In contrast, Robinhood (HOOD), a rival trading platform often compared to Coinbase due to its retail customer base, also reported a 13% drop in transaction-based revenue in April.
Despite these setbacks, Coinbase’s $2.9 billion acquisition of the crypto derivatives platform Deribit marks a significant shift. This move establishes Coinbase as a new leader in global crypto options trading, surpassing Binance and other competitors. Investors will now be closely monitoring how this strategic acquisition shapes the future of Coinbase’s role in the evolving derivatives market.
