--- title: "Coinbase Q1 Revenue Plunges 31%, Turns to Loss as Sluggish Crypto Market Drags Down Performance | Financial News" type: "News" locale: "en" url: "https://longbridge.com/en/news/285648692.md" description: "Coinbase reported a 31% year-over-year decline in Q1 revenue to $1.41 billion, exceeding market expectations for the drop. After accounting for unrealized losses on crypto holdings and investments, the company posted a net loss of $394 million, or $1.47 per share, compared to a net profit of $66 million in the same period last year. Following the earnings release, Coinbase's stock fell approximately 4.7% in after-hours trading, bringing its cumulative decline since December to over 15%" datetime: "2026-05-08T01:50:09.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/285648692.md) - [en](https://longbridge.com/en/news/285648692.md) - [zh-HK](https://longbridge.com/zh-HK/news/285648692.md) --- # Coinbase Q1 Revenue Plunges 31%, Turns to Loss as Sluggish Crypto Market Drags Down Performance | Financial News Cryptocurrency exchange Coinbase faced significant pressure on its Q1 performance, with both revenue and profits falling short of expectations. After the U.S. market close on May 7, Coinbase announced that **Q1 revenue declined 31% year-over-year to $1.41 billion, a drop larger than market expectations, continuing the downward trend following a 20% decrease in the previous quarter.** **After accounting for unrealized losses on crypto holdings and investments, the company recorded a net loss of $394 million, or $1.47 per share, compared to a net profit of $66 million in the same period last year.** The core trading business was the biggest drag this quarter. Coinbase's Q1 spot trading volume was $202 billion, down 50% year-over-year. However, the financial report was not weak across the board. Stablecoins and derivatives emerged as few bright spots: > - **USDC-related stablecoin revenue** increased 11% year-over-year to $305 million. > - **Institutional trading revenue** actually grew 37% year-over-year to $136 million, primarily benefiting from the contribution of derivatives revenue following the consolidation of Deribit. The company stated that after launching the "Everything Exchange" at the end of last year, derivatives, prediction markets, and decentralized trading all saw strong growth in the first quarter. Following the earnings release, Coinbase's stock fell approximately 4.7% in after-hours trading, bringing its cumulative decline since December to over 15%. ## Spot Trading Cools: Volume, Users, and Asset Prices Under Pressure Simultaneously Coinbase's core trading business was clearly dragged down by the cooling crypto market. **The platform's trading volume in Q1 was $202 billion, nearly half of the $401 billion recorded in the same period last year.** The company explained that global crypto spot market trading volume fell 44% year-over-year, compounded by a weakening market environment, which directly suppressed platform trading activity. Breaking it down by customer type: > - Consumer trading volume: $36 billion, down 54% year-over-year; > - Institutional trading volume: $166 billion, down 48% year-over-year. Since consumer trading fees are significantly higher than those for institutional clients, the decline in consumer trading volume had a greater impact on revenue. Consumer trading revenue fell from $1.096 billion in the same period last year to $567 million, a 48% year-over-year decline, representing the primary source of the drop in trading revenue. **In terms of trading asset structure**, Bitcoin has re-emerged as the main axis of trading. Bitcoin's share of trading volume rose to 40% in Q1, up from 27% in the same period last year; Ethereum's share rose to 19%, up from 11%; XRP's share fell to 9%, and USDT's share dropped sharply from 13% to 2%. **This indicates that trading activity is more concentrated in mainstream assets, while enthusiasm for long-tail assets and some stablecoins has declined.** **Regarding platform asset scale**, as of the end of March, assets on the Coinbase platform totaled $294.4 billion, lower than the $327.5 billion in the same period last year. The company stated that the main reason was a decrease in asset value of approximately $67.4 billion due to falling prices of most crypto assets, although the growth in the number of units of assets such as Bitcoin offset part of the impact. ## Trading Revenue Falls 40%, Institutional Business Grows "Against the Trend" Thanks to Deribit Coinbase's Q1 trading revenue was $756 million, down 40% year-over-year, but there was a clear divergence in its internal structure. Consumer trading revenue was $567 million, down 48% year-over-year, mainly dragged down by the decline in spot trading volume. Institutional trading revenue, however, increased from $98.89 million in the same period last year to $136 million, a 37% year-over-year increase. **The counter-trend growth in the institutional business did not come from spot trading, but from derivatives.** Coinbase disclosed that derivatives trading contributed approximately $68.5 million in incremental revenue, primarily stemming from the acquisition of Deribit completed in August 2025. Deribit is a crypto derivatives exchange. Coinbase acquired it for a total consideration of approximately $4.3 billion, including $721 million in cash and $3.573 billion in stock. The Deribit transaction resulted in approximately $2.819 billion in goodwill and $1.39 billion in identifiable intangible assets. With consolidation, Coinbase's institutional derivatives capabilities have strengthened, but this has also brought higher amortization and integration costs. **The expansion of the derivatives business is also reflected in the scale of collateral.** As of the end of Q1, the fair value of crypto assets pledged by customers for derivatives-related activities was $333 million, a significant increase from $27.4 million at the end of last year, indicating that derivatives trading activity has indeed surged. ## Stablecoins Are a Few Bright Spots, But Falling Interest Rates Begin to Erode Revenue Elasticity Subscription and services revenue in Q1 was $584 million, down 14% year-over-year. Among these, stablecoin revenue performed best at $305 million, an 11% year-over-year increase. The growth in stablecoin revenue mainly came from two factors: > - An increase in the average balance of USDC held by customers within Coinbase products, contributing approximately $64.2 million in incremental revenue; > - An increase in the average balance of USDC outside the platform, contributing approximately $23.2 million in incremental revenue. **However, this growth was significantly offset by falling interest rates.** The company stated that a 67 basis point decrease in average interest rates had a negative impact of $57.5 million on stablecoin revenue. Additionally, the company adjusted the presentation of some stablecoin revenue this quarter: revenue generated from enterprise payments on stablecoin balances was reclassified from "stablecoin revenue" to "enterprise interest and other income," without affecting total revenue. The amount related to this reclassification in the same period last year was $23.5 million. There is also a noteworthy concentration issue in the stablecoin business. **The financial report shows that one counterparty contributed 23% of Coinbase's total revenue in Q1, compared to 15% in the same period last year.** The company did not name the counterparty here, but considering the stablecoin revenue model, the market typically focuses on its revenue dependency relationship with Circle and the USDC ecosystem. ## Layoffs and AI Transformation Proceed in Parallel Facing downward market pressure, Coinbase has begun to cut costs and adjust its strategic focus. CEO Brian Armstrong announced on Tuesday that the company would lay off approximately 700 employees and focus the skill development of remaining staff on artificial intelligence, while streamlining management layers. The company expects this restructuring to incur costs of up to $60 million. Owen Lau also warned that if the crypto market deteriorates further, Coinbase may not rule out additional layoffs. Haas responded to this by stating: > We cannot predict the future, but as a public company, we will always do what is best for the company. **Changes in the competitive landscape are also impossible to ignore.** Morgan Stanley recently announced the launch of cryptocurrency trading services on its E\*Trade platform with more competitive pricing. The entry of traditional financial institutions is expected to put pressure on Coinbase's trading fee revenue. In response, Chief Financial Officer Alesia Haas stated: > We have long anticipated that trading fees would become commoditized. 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