With the U.S. economy facing some uncertainty, Coinbase’s shares dropped nearly 3% in after-hours trading following a substantial revenue decline in the first quarter.
The cryptocurrency exchange announced revenues of $2 billion, down from $2.27 billion in the previous quarter. Earnings per share were reported at $0.24, significantly lower than the analyst estimate of $1.93, according to FactSet data.
Trading volume decreased by 10% compared to the previous quarter, totaling $393.1 billion, with trading revenue dropping to $1.3 billion—around 19% less than the fourth quarter.
In a letter to shareholders, Coinbase noted that while average cryptocurrency volatility surged in Q1, highlighted by Bitcoin reaching a new all-time high in January, overall prices fell due to broader market declines influenced by tariff policies and macroeconomic concerns.
Analysts from JP Morgan, Barclays, and Compass Point had already lowered their revenue forecasts ahead of the reports, as crypto trading volumes sharply declined since January amid economic uncertainties.
Meanwhile, Robinhood, a trading platform often compared to Coinbase, reported a 13% decrease in trading revenues for April.
On a brighter note, Coinbase’s $2.9 billion acquisition of DeLibit has positioned it as a potential leader in the global crypto options trading market, surpassing competitors like Binance. This strategic move could open up new opportunities for the derivatives market, something that investors are watching closely.
Update: The stock price continues to show a downward trend.
