Coinbase Posts Surprise Q1 Loss as Crypto Slump Hits Trading Revenue

CNBC reported Thursday that Coinbase delivered a sharp first-quarter loss. The result blindsided analysts expecting a modest profit.

Coinbase First-Quarter Loss Stuns the Street

The crypto exchange posted a loss of $1.49 per share for the quarter ended March 31. Analysts surveyed by LSEG had penciled in a profit of 27 cents per share. Revenue landed at $1.41 billion, falling well short of the $1.52 billion consensus estimate. Shares of COIN slid roughly 4% in after-hours trading following the release.

Transaction revenue, the company’s largest income line, came in at $755.8 million. Analysts had expected closer to $805 million. Subscription and services revenue reached $583.5 million, also missing the $619 million forecast. Both shortfalls traced back to the same culprit: a rough stretch for digital asset prices early in the year.

Background: Bitcoin’s Rocky Start to 2026

Bitcoin fell roughly 22% across the first quarter, even as it staged a 12% recovery in March alone. The downturn significantly compressed spot trading volumes on the platform. Coinbase has long depended on transaction fees as its primary revenue engine, making it acutely sensitive to price swings in the broader market.

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Diversification Push Shows Early Promise

Despite the top and bottom-line misses, CEO Brian Armstrong has pushed aggressively to reduce the company’s reliance on spot crypto trading. First-quarter derivatives volume reached approximately $4.2 billion, a 169% jump versus the same period last year. Coinbase also flagged that its prediction markets business, launched in late January alongside exchange partner Kalshi, is on track to generate $100 million in annualized revenue by year-end.

Armstrong has described his long-term ambition as building an “everything exchange” that handles derivatives, tokenized real-world assets, and event contracts alongside traditional crypto trading.

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Layoffs Signal Caution on Near-Term Outlook

Earlier this week, Coinbase announced plans to eliminate roughly 700 positions, equal to about 14% of its workforce. The company framed the cuts as an AI-driven restructuring, though the crypto market downturn was cited as a contributing factor. Wall Street interpreted the move as a signal that management expects soft trading conditions to extend into the second quarter. Analysts and investors were scheduled to hear more from the executive team during an earnings call Thursday evening.

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