- Q4 revenue at Coinbase fell 22% year over year to $1.78 billion and the company reported a $667 million net loss driven by portfolio declines
- Stablecoin revenue rose to $364 million and blockchain rewards reached $151 million while derivatives trading helped push total volume to $271 billion
Coinbase reported weaker fourth-quarter results as last year’s retreat in Bitcoin from record levels weighed on trading activity and investment values. The San Francisco-based crypto exchange released figures showing lower revenue, a sharp swing to loss, and continued sensitivity to broader market conditions, even as it emphasized progress in diversifying away from pure trading fees.
Coinbase earnings show sharp swing to quarterly loss
For the fourth quarter, Coinbase disclosed revenue of $1.78 billion. That was 22% lower than in the same period a year earlier and fell short of analysts’ consensus estimate of $1.84 billion. The company recorded a net loss of $667 million, a reversal from the prior year’s quarter when it reported $1.3 billion in profit in the wake of Donald Trump’s re-election. Management attributed the loss primarily to a $718 million decline in the value of its investment portfolio, a hit it described as largely unrealized. Strategic holdings, including its stake in Circle, also dropped in value by $395 million.
Anil Gupta, Coinbase’s vice president of investor relations, described the investment portfolio as being managed with a long-term mindset rather than active trading. He said the firm generally follows a buy-and-hold approach, noting that any liquidations are tied to operational needs rather than an effort to realize gains. The company stressed that it does not actively trade digital assets within that portfolio as part of its strategy.
Transaction-based revenue, which remains a core pillar of the business, totaled $983 million during the quarter. That was down from $1 billion in the third quarter, underlining the recent slowdown in customer trading. In contrast, amid Trump’s win in the White House, Coinbase’s transaction revenue surged to $1.56 billion in the fourth quarter of 2024, highlighting how volatile political and market environments can significantly affect activity on the platform.
Market pressure, stock volatility, and capital position
Coinbase’s stock reflected the market’s cautious stance ahead of the earnings release. According to Yahoo Finance, the shares fell 7.9% to $141 before the results were announced. Over the prior six months, the stock had already dropped more than 55%, a slide that paralleled the broader downturn in cryptocurrencies. After-hours trading following the release was choppy, with the share price recently ticking slightly higher to just above $142.
Despite the quarter’s setback, Coinbase emphasized its balance sheet strength. The company reported holding $11.3 billion in cash and cash equivalents, and described itself as “deliberately well capitalized” to manage the ups and downs of crypto market cycles. At the same time, the latest figures underscored the firm’s ongoing exposure to market swings given its heavy reliance on trading fees. The downturn in Bitcoin and the wider crypto complex contributed directly to weaker volumes and lower revenue.
Analysts have taken a more guarded view. Earlier in the week, JPMorgan lowered its price target on Coinbase’s stock to $290 from $399. The bank cited reduced crypto trading volumes, a significant fall in total crypto market capitalization during the fourth quarter, and a decline in USDC circulation as reasons for the downgrade. There were also indications that management anticipated a challenging update, with Argus Research analyst Kevin Heale noting that he had not previously seen a company request that analysts submit questions in advance of an earnings call.
Diversification: stablecoins, subscriptions, and derivatives
While trading remains central, Coinbase highlighted continued growth in other revenue streams. Stablecoin-related earnings reached $364 million in the fourth quarter, up from $226 million a year earlier. The company derives that income through a revenue-sharing arrangement with Circle, under which Coinbase retains a portion of the interest generated by USDC’s reserves. This line of business falls under the firm’s subscriptions and services segment, which also includes staking.
Blockchain rewards, generated when users participate in validating transactions on various networks, contributed $151 million in the quarter. In its shareholder letter, Coinbase pointed to these and other offerings as evidence that the firm is no longer solely dependent on spot trading fees. The company said it now has 12 different products each producing more than $100 million in annualized revenue, a level of diversification that outside observers see as important in a downturn. Zacks Investment Research stock strategist David Bartosiak described stablecoins and subscription-based services as acting like “shock absorbers when trading cools.”
Gupta argued that Coinbase has evolved into a broader platform compared with several years ago, citing the expansion of its product lineup. A central element of this shift has been the company’s push into derivatives. Following its $2.9 billion acquisition of Deribit last year, coinbase said it is “doubling down” on the derivatives market. Although the company did not disclose a specific total, it reported achieving record quarterly derivatives trading volumes in the fourth quarter. Overall trading volume reached $271 billion, a level management said outpaced the broader market due in part to derivatives growth, even as overall conditions remained soft.
The firm continues to put emphasis on Base, its Ethereum layer-2 scaling network, positioning it as a way to tie the business more closely to decentralized finance. Last year, Coinbase said it was exploring a token for Base that could carry an estimated value between $12 billion and $34 billion. It also indicated plans to enable trading of traditional stocks as part of a wider move toward tokenization, with Base described internally as a key step toward that objective.
Outlook and early first-quarter signals
Looking ahead, Coinbase has already given an early glimpse into first-quarter momentum. Through February 10, the company said it had generated $420 million in transaction revenue, a figure Gupta interpreted as evidence that customers are taking advantage of the latest pullback in crypto prices. He said retail users appear to be holding onto their assets rather than selling into the downturn, and that Coinbase is seeing substantial buying interest from these customers so far this quarter.
At the same time, the company continues to face an environment marked by fluctuating prices, lower overall crypto capitalization, and shifting regulatory and macroeconomic conditions. The firm’s decision to lean more heavily on derivatives, stablecoin revenue sharing, staking, and other services is designed to reduce the volatility of its income, but recent results show that trading activity still drives much of the financial outcome.
Key takeaways
- Q4 revenue was $1.78 billion, down 22% year-over-year and below the $1.84 billion analyst estimate.
- Net result swung to a $667 million loss, driven by a $718 million portfolio value decline and $395 million hit to strategic investments.
- Transaction revenue fell to $983 million, while stablecoin revenue rose to $364 million and blockchain rewards to $151 million.
- Total trading volume reached $271 billion, boosted by record derivatives activity after the $2.9 billion Deribit acquisition.
- Coinbase reported $11.3 billion in cash and equivalents and early Q1 transaction revenue of $420 million through February 10.
Conclusion
Coinbase’s latest quarter illustrated both the challenges and the adjustments facing a major crypto exchange in a cooling market. The company reported a sizable loss amid falling asset values and lower activity, while its share price has been under pressure for months. Yet management underscored a stronger capital base, rising contributions from stablecoins and subscriptions, record derivatives volumes, and a growing product set that now spreads revenue across more lines of business. Early indications from the current quarter suggest that retail customers are using recent price weakness to add to positions, leaving Coinbase still tightly linked to the ebb and flow of digital asset markets even as it works to broaden its footing.
Disclaimer
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