Late Thursday, Coinbase Global Inc. released a dismal quarter, blaming the decline in cryptocurrencies and the market as a whole on tariffs and economic uncertainties.
Compared to fourth-quarter sales, first-quarter sales fell short of Wall Street’s estimates. The business predicted lower subscription sales for the current quarter after displaying an even more sharp decline in transaction revenue from quarter to quarter.
During the extended session, Coinbase’s stock (COIN) dropped 2.7%.
Copies of cryptocurrency “dropped alongside broader market declines driven by tariff policy and macroeconomic uncertainty,” according to a letter sent to shareholders by Coinbase officials. According to the business, the entire value of the cryptocurrency market dropped 19% from the fourth quarter to $2.7 trillion in the first quarter.
From $1.64 billion in the same period last year to $2 billion in the first quarter, Coinbase’s revenue exceeded FactSet’s projections of $2.1 billion.
The business reported that transaction revenue fell 19% on a quarter-over-quarter basis to $1.3 billion, while subscription and services revenue increased 9% on a quarter-over-quarter basis to $698 million, primarily due to stablecoin revenue.
Coinbase projected reduced subscription and service revenue for the current quarter, ranging from $600 million to $680 million. Additionally, the company’s first-quarter subscription and services revenue fell short of its previous guidance, which had projected such revenue to be between $685 million and $765 million.
The anticipated quarterly increase in stablecoin revenue is anticipated to be “more than offset by a decline in blockchain rewards revenue due to lower asset prices,” according to Coinbase.
The company’s GAAP earnings of 24 cents per share were significantly lower than the $1.93 per share average.
When Coinbase was included in the study, investors became alarmed, and a number of investment banks reduced their projections. Earlier this week, MCH analysts cut Coinbase’s stock to the equivalent of hold, citing “tepid” forecasts and outcomes.
Coinbase said earlier Thursday that it has reached an agreement to pay about $2.9 billion to acquire Deribit, the largest bitcoin and ether options trading platform in the world, which is based in Dubai. The deal was initially reported by the Wall Street Journal.
The deal would provide Coinbase with “an immediate and dominant foothold in the high-growth derivatives space ahead of an anticipated increase in institutional adoption of digital assets,” according to a note released Thursday by Benchmark analysts.
They claimed that Coinbase’s institutional appeal would be enhanced by Derebit’s “sophisticated” trading capabilities, which target institutional and high-frequency traders.
Coinbase’s stock has fallen almost sixteen percent so far this year, trailing the 3% decline in the S&P 500 index SPX.
