Crypto exchange Coinbase's revenue falls 10% quarter-over-quarter to $2 billion

Crypto exchange Coinbase's (NASDAQ:COIN) total revenue in Q1 dropped 10% from the previous quarter to $2 billion, narrowly missing industry estimates by 4.1% as trading activity slowed across the market.

Coinbase's net income was slashed by 95% from a nearly record-high of $1.29 billion in Q4 to $66 million, largely due to a $596 million paper loss on its crypto holdings.

However, the firm's earnings per share of $1.94 exceeded the Zacks Consensus Estimate of $1.85 for the quarter.

Coinbase's May 8 results also showed that transaction revenue fell 18.9% to $1.26 billion, and trading volume dipped 10.5% to $393 billion as crypto market cap dropped by double digits, partly due to the Trump administration's tariffs.

In contrast, U.S. President Donald Trump's election victory in November was considered one of the main catalysts behind the rising market prices in Q4.

Meanwhile, Coinbase's subscription and services revenue rose 8.9% to $698.1 million, with stablecoin revenue being the most significant contributor.

Despite the decline in total revenue and trading volume, Coinbase said it gained more market share in global spot and derivatives trading and deepened its presence in emerging markets like Argentina and India with "critical registrations."

On the regulatory front, Coinbase said the dismissal of its lawsuit with the U.S. securities regulator marked a "major judicial win for balanced, innovation-friendly regulation, and our efforts to make crypto mainstream."

Coinbase makes deal with major crypto derivatives platform

Coinbase has agreed to acquire crypto derivatives platform Deribit for $2.9 billion, marking the industry's largest corporate acquisition to date.

The acquisition will expand Coinbase's footprint in the crypto derivatives market immensely, which was previously limited to its Bermuda-based platform.

Coinbase noted that Deribit facilitated over $1 trillion in trading volume in 2024 and has around $30 billion of current open interest.

The deal now makes Coinbase the "global leader" in crypto derivatives trading. Competitor firm Kraken (NASDAQ:CRWND) made a similar move when it agreed to acquire futures brokerage NinjaTrader for $1.5 billion earlier this year.

Coinbase's Deribit deal contributed to a 5.1% rise in Coinbase (NASDAQ:COIN) shares during May 8 trading, though the stock pulled back 3.1% in after-hours since the crypto exchange posted its Q1 results.