Compiled by: Felix, PANews

On the evening of May 7, the American cryptocurrency exchange Coinbase released its financial report for the first quarter (Q1) of the fiscal year 2026. The report shows that due to the decline in cryptocurrency prices and a decrease in trading volume, the exchange experienced significant losses in the digital assets held on its balance sheet, with a net loss of 394.1 million USD in the first quarter.

In response to this negative news, Coinbase's stock price dropped by 2.53% after the release of the financial report, currently reported at 192.96 USD; the loss per share was 1.49 USD, which is lower than analysts' expectations of a profit of 0.27 USD per share.

Decline in quarterly revenue, impairment of assets the main cause of loss

The cryptocurrency market experienced a rollercoaster ride in the first quarter of 2026. Bitcoin once broke through the high of 97,000 USD in January this year, but then sharply corrected and fell to about 63,000 USD in early February, continuing to oscillate below 70,000 USD at the end of the quarter. The market sell-off and cooling directly impacted Coinbase's trading activity.

Coinbase's total revenue for Q1 was 1.413 billion USD, below the previous expectation of 1.52 billion USD, a quarter-over-quarter decrease of 21%, and a significant drop of 31% compared to 2.034 billion USD in the same period of 2025. On the profit side, Coinbase recorded a net loss of 394.1 million USD. Although Coinbase achieved a net profit of 1.26 billion USD for the entire year of 2025, this marks the second consecutive quarter of losses for Coinbase since Q4 of 2025. In the previous quarter, the company reported a net loss of 667 million USD.

The core reason for the Q1 loss was asset impairment. The financial report disclosed that due to the sharp decline in cryptocurrency prices, Coinbase recorded a book loss of 482 million USD for the crypto assets held on its balance sheet for investment purposes.

Additionally, due to a decrease in the willingness of retail and institutional traders to engage, there was a significant decline in overall cryptocurrency trading volume and spot market trading volume in Q1, with cryptocurrency market trading volume decreasing by 28% quarter-over-quarter and spot trading volume decreasing by 37%. Trading revenue fell sharply by 40% year-over-year to 756 million USD, down 23% quarter-over-quarter.

Among them, influenced by a 35% decline in retail spot trading volume, retail trading revenue fell 23% quarter-over-quarter to 567 million USD. Institutional trading revenue decreased by 27% quarter-over-quarter to 136 million USD, consistent with the overall downward trend in the market. Due to the decline in instant transfer activities and base revenue, other trading revenue decreased by 17% quarter-over-quarter to 53 million USD. Adjusted EBITDA was 303 million USD, significantly down from 930 million USD in the same period last year.

Despite weak trading volume, Coinbase's subscription and services revenue showed some resilience. This revenue in Q1 only decreased by 14% to 584 million USD. In terms of stablecoins, driven by the market capitalization growth of USDC and the average holdings of USDC in Coinbase products reaching a record high (19 billion USD), stablecoin revenue was 305 million USD, an increase of 11% year-over-year.

On the expense side, driven by one-time costs related to acquisition activities in Q4 2025, technology and R&D expenses increased by 6% quarter-over-quarter to 526 million USD. General and administrative expenses decreased by 17% quarter-over-quarter to 376 million USD. Trading expenses were 196 million USD, and sales and marketing expenses were 267 million USD, both decreasing quarter-over-quarter, with costs adjusted according to market fluctuations.

Market share hits new high against the trend, layoffs a desperate measure for survival

Although both revenue and profit fell short of expectations, Coinbase's diversified product offerings, including event contracts and support for crypto derivatives, achieved notable growth.

Coinbase's global cryptocurrency trading volume market share climbed to 8.6%, hitting a historic high. In the derivatives sector, Coinbase's derivative trading volume in the first quarter was about 4.2 billion USD, growing by 169% year-over-year. Meanwhile, Coinbase stated that its Base blockchain processed 62% of the global on-chain stablecoin trading volume in this quarter, with over 90% of on-chain proxy stablecoin trading volume coming from the Base platform. Coinbase also predicted that its prediction market business will reach an annualized revenue of 100 million USD by the end of this year. This business segment was launched in late January in collaboration with Kalshi.

Additionally, in response to the volatility in the crypto market and to adapt to the AI wave, Coinbase previously announced layoffs of about 14% of its global workforce, affecting approximately 700 positions. Coinbase CEO Brian Armstrong emphasized that the company will reshape its operations around AI in the future, making the team smaller and more efficient, and driving automation processes and decision support with AI.

It is worth mentioning that despite facing short-term pain, Brian Armstrong remains optimistic about the future, stating that the on-chain economy has reached explosive growth and that the next frontier is proxy trading, which will be launched on the Coinbase platform. With its unique advantages, the company is set to take full advantage of this transformation. The company is transitioning from a "crypto platform focused on spot trading" to a platform where users can trade multiple asset classes.

Related reading: The cryptocurrency industry joins the Silicon Valley layoff wave! Coinbase lays off 14%, CEO: AI is bringing profound changes

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