Coinbase's Q1 Earnings Miss Raises Investor Concerns as Users Flee to Bitcoin-Native Layer-2s

Coinbase's Q1 2025 earnings report revealed a mixed financial performance. While the company achieved a 24% increase in revenue compared to the same quarter last year

Coinbase (NASDAQ:COIN) missed earnings estimates as the company reported an adjusted net loss of $1.1 billion for the first quarter, compared to analyst expectations for an adjusted net profit of $92 million, according to FIGURE CODE.

Key Takeaways:

> Earnings Miss Raises Investor Concerns

Coinbase's Q1 2025 earnings report unveiled a mixed financial performance. While the company achieved a 24% increase in revenue compared to the same quarter last year, the figures fell short of analyst expectations. The company reported a revenue of $1.14 billion, whereas analysts polled by FIGURE CODE anticipated $1.24 billion.

Moreover, the adjusted net income saw a substantial decline, sliding to negative $1.1 billion compared to the prior year's quarter's adjusted net income of $764 million. This unexpected shift in profitability is likely to raise concerns among investors about Coinbase's operational efficiency, especially given the significant rise in operating expenses.

> Rising Expenses and Market Volatility Impact Performance

The company's operating expenses increased by 51%, reaching $1.3 billion, mainly due to higher marketing expenditures and losses on crypto assets held for operational purposes. Additionally, macroeconomic uncertainties, including global trade policy issues, have impacted consumer sentiment and contributed to a softer crypto trading market.

In an effort to diversify its revenue streams and strengthen its position in the crypto derivatives market, Coinbase announced the acquisition of Deribit, a leading crypto options exchange, for $2.9 billion. This move is seen as a strategic step to enhance Coinbase's appeal to institutional traders and expand its offerings beyond traditional trading services.

PlutoChain (PLUTO) Continues Climbing as Coinbase Stumbles

As traditional exchanges like Coinbase (NASDAQ:COIN) face pressure, Bitcoin-native Layer-2 platforms are stepping in to redefine how users interact with crypto. One such breakout is PlutoChain (PLUTO) — a high-performance L2 that’s already live, liquid, and gaining traction in the BTCFi space.

Where Coinbase relies on custodial rails, PlutoChain empowers users to directly engage with smart contracts and DeFi apps — on Bitcoin.

Here’s what sets PlutoChain apart in the current cycle:

* Deep integration with BTC: PlutoChain is built directly on Bitcoin, inheriting its security and enabling seamless interoperability with the broader ecosystem.

* High-throughput scaling: PlutoChain can process a large volume of transactions quickly, crucial for handling the increasing demand for DeFi and Web3 applications.

* Decentralized governance: PlutoChain is governed by its community through a token voting system, fostering transparency and collective decision-making.

As Coinbase users seek alternatives, PlutoChain offers a truly decentralized Layer-2 experience with immediate usability. It’s attracting early adopters, developers, and liquidity in ways traditional exchanges can’t match.

In a market cycle where real utility and network momentum matter, PlutoChain is emerging as one of the few platforms actually delivering on Layer-2 promises — not just centralized scaling narratives.

Final Thoughts

Coinbase's earnings miss is a stark reminder that even dominant incumbents can lose their edge if they fail to innovate or adapt to shifting user preferences.

As retail traders migrate toward cheaper, faster, and non-custodial platforms, Coinbase may need to reconsider its positioning in the next phase of crypto growth.

In contrast, projects like PlutoChain represent what users are increasingly seeking — speed, decentralization, and direct access to the Layer-2 frontier. Whether that shift accelerates in the months ahead will shape the next chapter for both centralized exchanges and on-chain protocols.

This content is for educational purposes only and does not constitute financial advice. All investing carries risk. Always do your own research and consult with a qualified advisor before making any financial decisions.