Coinbase shares fall after first-quarter revenue misses Wall Street estimates

Core Insights - Coinbase's first-quarter revenue fell short of Wall Street expectations despite an increase in stablecoin revenue [1][2] Financial Performance - In Q1, Coinbase reported earnings of $65.6 million, or 24 cents per share, a significant decline from $1.18 billion, or $4.40 per share, a year earlier [2] - Adjusted earnings, excluding crypto investments, were $527 million, or $1.94 per share [2] - Revenue increased to $2.03 billion from $1.64 billion year-over-year, but was below the consensus estimate of $2.12 billion [2] Revenue Breakdown - Transaction revenue for the quarter was $1.26 billion, while subscription and services revenue reached $698.1 million [3] - Consumer trading volume decreased by 17% from the previous quarter to $78.1 billion, influenced by elevated volumes at the end of last year due to political events [3] Market Trends - Institutional trading volume fell 9% from the fourth quarter to $315 billion [4] - Despite a record high for Bitcoin on January 20, volatility caused by concerns over tariff policies dampened investor interest in cryptocurrencies [4] Future Outlook - For Q2, Coinbase anticipates subscription and service revenue between $600 million and $680 million [5] - The company expects stablecoin revenue growth to be offset by lower blockchain rewards due to declining asset prices [5] Strategic Developments - Coinbase announced plans to acquire Dubai-based Deribit, a major crypto derivatives exchange, for $2.9 billion, marking the largest deal in the crypto industry to date [6] - The acquisition aims to expand Coinbase's presence outside the U.S. and its derivatives business continues to gain market share [6]