- Coinbase missed Q1 2025 revenue estimates, posting $2.03B vs. $2.2B expected, despite Bitcoin nearing $100K.
- Transaction revenue declined as macro uncertainty and cautious retail sentiment dampened trading activity.
- Acquired Deribit for $2.9B to expand into crypto derivatives amid slowing spot trading growth.
Coinbase, the largest publicly traded cryptocurrency exchange in the United States, reported a disappointing set of first-quarter earnings on Thursday, with revenue falling short of Wall Street expectations despite a surging crypto market. The company also revealed an aggressive expansion into the derivatives space with a multibillion-dollar acquisition.
Coinbase posted $2.03 billion in revenue for Q1 2025, falling short of analysts’ forecasts of $2.2 billion. That marked a 10% decline from the prior quarter, even as Bitcoin soared to nearly $100,000 during the period, highlighting a surprising divergence between market prices and trading volumes.
Transaction revenue, historically Coinbase’s core income stream, came in at $1.26 billion, below the expected $1.33 billion, as both retail and institutional trading activity lagged. The company attributed the slump to macroeconomic uncertainty and a broader risk-off sentiment fueled by U.S. policy ambiguity, which appeared to keep investors sidelined.
“Our performance this quarter reflects a cautious tone in the market, especially among retail users,” Coinbase said in a statement.
Coinbase Buys Deribit for $2.9B Amid Profit Drop
Despite the Q/Q slowdown, total revenue was still up year-over-year, increasing from $1.64 billion in Q1 2024. Coinbase’s stablecoin business, especially around USDC, emerged as a bright spot. Revenue from that segment climbed 32% quarter-over-quarter, with the average USDC balance held across its platform jumping 49% to $12 billion.
However, adjusted net income dropped to $526.6 million, or $1.94 per share, from $679.2 million ($2.53 per share) in the same quarter last year. Rising costs were a key factor, with operating expenses spiking 51% year-over-year to $1.3 billion, largely due to heavier marketing spend and write-downs on crypto assets held for operations.
Following the earnings miss, Coinbase shares dipped around 3% in after-hours trading.
In a move signaling a strategic pivot, Coinbase also announced it has inked a definitive agreement to acquire Deribit, one of the world’s largest crypto options exchanges, for $2.9 billion. The deal includes $700 million in cash and 11 million shares of Coinbase stock.
Based in Dubai, Deribit handled over $1 trillion in crypto derivatives volume last year, making it a powerhouse in the rapidly expanding digital asset derivatives sector. The acquisition, expected to close later this year pending regulatory approval, positions Coinbase to become a global leader in the crypto derivatives market, an increasingly critical area for growth as the spot trading business matures.
“This acquisition marks a major step forward in our mission to build the world’s leading financial hub for the crypto economy,” said Coinbase CEO Brian Armstrong.
Coinbase, Ripple Lead Crypto M&A Amid U.S. Policy Shift
Amid growing optimism in U.S. crypto regulation, especially after former President Donald Trump pledged to make the country the “world capital of crypto,” major industry players are racing to strengthen their positions. Ripple recently made waves with its $1.25 billion acquisition of multi-asset prime broker Hidden Road, marking one of the biggest deals in its history.
Meanwhile, Coinbase is accelerating its diversification strategy, positioning itself for a future increasingly focused on crypto derivatives. This shift reflects a broader trend across the industry, as attention moves from retail spot trading to institutional-grade products.
Market watchers are closely monitoring these developments to determine whether institutional adoption and advanced financial instruments will define the next phase of crypto’s evolution. The landscape is rapidly changing as leaders adapt to the new regulatory and market dynamics.
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