Shares of Coinbase (COIN) fell nearly 3% in post-market trading after reporting a significant drop in revenue for the first quarter of the year. This decline has raised concerns as it came in below analyst estimates, coinciding with broader market cooling amid economic uncertainty in the U.S.
The crypto exchange stated it recorded $2 billion in revenue, a decrease from $2.27 billion in the fourth quarter and trailing the Street’s expectations of $2.1 billion. Additionally, Coinbase reported earnings per share of $0.24, missing the average analyst estimate of $1.93, according to data from FactSet.
Trading volume experienced a 10% decrease, falling to $393.1 billion quarter over quarter. Transaction revenue also declined, totaling $1.3 billion, approximately 19% lower than the fourth quarter.
In a letter to shareholders, Coinbase noted, “Q1 saw increased average Crypto Asset Volatility, with BTC reaching a new all-time high price in January. However, crypto prices dropped alongside broader market declines driven by tariff policy and macroeconomic uncertainty.”
Prior to the earnings report, analysts at J.P. Morgan, Barclays, and Compass Point had already revised their forecasts downwards as crypto trading volume sharply slowed since January, largely due to uncertainties surrounding the future of the U.S. economy.
In a similar vein, trading platform Robinhood (HOOD), known for its retail-focused clientele, reported a 13% drop in transaction-based revenue in April, reflecting the same trend seen at Coinbase.
Despite these challenges, Coinbase’s strategic move to acquire derivatives exchange Deribit for $2.9 billion positions it as a leader in global crypto options trading, overtaking competitors such as Binance and others. This acquisition sets the stage for a transformative chapter in the derivatives markets, one that stakeholders will be keenly observing.
Read more: Coinbase’s $2.9B Deribit Deal a ‘Legitimate Threat’ for Peers, Wall Street Analysts Say
UPDATE (May 8, 20:43 UTC): Adds additional paragraph at the end and share price decline.
