Coinbase disclosed $1.78 billion in fourth-quarter revenue on Thursday, indicating that its business suffered alongside Bitcoin’s retreat from all-time highs last year.
The figure represented a 22% decrease compared to a year ago, while fourth-quarter revenue also fell short of analysts’ expectations of $1.84 billion.
Coinbase posted a net loss of $667 million for Q4, marking a reversal from a year ago, when the firm notched $1.3 billion in profits alongside President Donald Trump’s re-election.
Coinbase said the loss stemmed from a $718 million decrease in the value of its investment portfolio, which was largely unrealized. At the same time, strategic investments, including in Circle, lost $395 million in value.
The company said that it earned $983 million from facilitating customers’ transactions. That marked a quarter-over-quarter decrease from $1 billion in Q3. Amid Trump’s White House win, transaction revenue surged to $1.56 billion in Q4 2024.
Coinbase shares slid 7.9% to $141 before the company announced fourth-quarter earnings, according to Yahoo Finance. As the crypto market has come under pressure, the company’s stock price has dropped more than 55% within the past six months.
In after-hours trading, the company’s stock swung wildly, recently showing a slight uptick to just above $142.
Despite Coinbase’s efforts to diversify its business in recent years, the firm’s latest performance showed how the San Francisco-based exchange is still exposed to a fast-changing crypto market through its reliance on charging customers trading fees.
Still, Coinbase disclosed $364 million in fourth-quarter stablecoin revenue, up from $226 million a year prior. The company earns income through a revenue sharing agreement with Circle, where it reserves a portion of the interest that USDC’s reserves generate.
The metric falls under the exchange’s subscriptions and services umbrella, along with staking. In its fourth quarter, Coinbase said that so-called blockchain rewards, which come from users participating in the process of validating transactions, came in at $151 million.
Earlier this week JPMorgan analysts downgraded their price target to $290 from $399. They pointed to lower crypto trading volumes, a significant drop in the total crypto market capitalization in Q4, and falling USDC circulation.
There were hints that Coinbase could be bracing for a disappointing quarter, with Argus Research analyst Kevin Heale telling Decrypt earlier this week that he’d never seen a company ask analysts to submit questions in advance of an earnings announcement.
The company continues to prioritize Base, its Ethereum layer-2 scaling network, as a way to augment its business using decentralized finance. And last year, the company said that it was exploring a token for the network that could be worth an estimated $12 billion to $34 billion.
The firm views Base as a key stepping stone towards tokenization. Last year, the company signaled that it would allow users to trade stocks traditionally as it works towards that vision.
