News 
May 8, 2025 
3 min. 
Coinbase stock dropped nearly 3% in after-hours trading following the company’s weaker-than-expected Q1 earnings report. The crypto exchange giant posted $2 billion in revenue, falling short of Wall Street’s $2.1 billion projection and slipping from $2.27 billion in Q4, a sign of cooling crypto market activity amid U.S. economic uncertainty.
Earnings Miss Deepens Wall Street Worries
Earnings per share came in at just $0.24, significantly missing the $1.93 average estimate from analysts tracked by FactSet. The disappointing results further pressured Coinbase stock as traders reacted to slowing momentum in digital asset markets.
The exchange also saw a 10% drop in trading volume, totaling $393.1 billion for the quarter. Transaction-based revenue fell to $1.3 billion, a 19% decline compared to the previous quarter, reflecting reduced user engagement and trading frequency.
Market Volatility and Economic Uncertainty to Blame
In its shareholder letter, Coinbase noted:
“Q1 saw increased average crypto asset volatility with BTC reaching a new all-time high in January. However, crypto prices declined alongside broader market downturns driven by tariff policies and macroeconomic headwinds.”
Top investment firms including J.P. Morgan, Barclays, and Compass Point had already revised their earnings forecasts downward ahead of the report, citing a steep decline in trading volumes and uncertainty surrounding the U.S. economic outlook.
Broader Crypto Industry Sees Similar Slowdown
Meanwhile, Robinhood (HOOD), often seen as a benchmark for Coinbase’s retail user base, reported a 13% drop in transaction-based revenue in April, highlighting a wider industry trend.
A Strategic Pivot Toward Derivatives
Still, not all headlines are negative for Coinbase. Its recent $2.9 billion acquisition of Deribit, a leading derivatives exchange, has catapulted it into the top spot in global crypto options trading. This move positions Coinbase ahead of Binance and other major players. It could mark the beginning of a new era in derivatives markets, one that institutional and retail investors alike will be monitoring closely.
