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Coinbase (NASDAQ: COIN) reported its first quarterly loss in two years, and the digital asset exchange’s executives proved curiously unwilling to face live questions from analysts on their earnings call.
- Coinbase posts first quarterly loss in two years
- Transaction volume data redacted
- Stablecoin lifeline under threat
- Expenses up, Q1 outlook down
- Analysts frozen out of earnings call
- Insiders haven’t bought Coinbase stock in two years
- Platform as unreliable as ever
- Worst. Boy. Band. Ever.
- Freedom of disinformation
- Aussie banks tell Coinbase to up their AML game
The gods clearly have a sense of humor, as Coinbase’s Q4/FY25 earnings report was released on a day in which the price of major tokens took yet another tumble. Exactly one Thursday ago, it was Strategy (NASDAQ: MSTR) reporting losses in the billions as the BTC token’s price suffered one of the biggest single-day drops in its 17-year history. This Thursday’s plunge was smaller, but it did suggest that the recent post-plunge ‘rally’ may have been more of a dead-cat bounce.
At any rate, Coinbase reported revenue of $1.78 billion in the final quarter of 2025, a 4.7% decline from Q3. That sum was also 21.5% below the final three months of 2024, during which crypto euphoria reigned following Donald Trump’s election to a second term as U.S. president.
Coinbase booked a devilish net loss of $666.7 million in Q4, a significant swing from Q3’s $433 million profit and an even wilder swing from Q424’s $1.3 billion payday. It’s also the company’s first quarterly loss in two years after rebounding from the depths of 2022’s ‘crypto winter.’
Coinbase took a $718 million hit from the dramatic fall in token prices that happened just as Q4 got underway, but the company also lost $395 million from downgrades in its unspecified ‘strategic investments.’
Translation: when token prices are soaring, Coinbase’s C-suite looks like the smartest guys/girls in the room. When prices tank, it’s not their fault; it’s just market conditions developing not necessarily to their advantage.
As the prices of BTC, ETH, and other prominent tokens nosedived last week, Coinbase CEO Brian Armstrong tweeted that this was just another ‘market cycle’ crypto has endured over the years. Armstrong restated his belief that “I don’t see how you can be anything but long-term bullish on crypto.”
Actually, it’s easy! See, if it wasn’t for the likes of Michael Saylor, Binance, Tom Lee, and other ‘plunge protection’ types rushing in to shore up token prices with multi-million dollar buys, this week’s ‘rally’ wouldn’t have happened. Retail disinterest in all things crypto is a very real phenomenon, as Coinbase’s own Q4 numbers bear out. Read on…
Transaction volume data goes behind the veil
For some reason, Coinbase opted against including the usual trading volume charts in its Q4 report, so we’re left in the dark as to how individual tokens contributed to activity on the exchange and Coinbase’s bottom line.
(We half suspect this is Coinbase’s way of further de-emphasizing their purge of Tether’s USDT stablecoin from the platform, all the better to shine the spotlight on USDC, the stablecoin issued by Circle (NASDAQ: CRCL), in which Coinbase holds a significant equity stake. But more on this later.)
Coinbase did provide headline volume figures, showing consumer transaction volume fell 6% to $56 billion in Q4, while consumer transaction revenue fell 13% to $734 million. For the year as a whole, consumer transaction revenue was down 3.1% to $3.3 billion.
Coinbase’s 10k filing doesn’t offer any ‘monthly transacting user’ stats for Q4, but the FY25 figure was 9.2 million, 10% higher than 2024. However, overall trading volume was up only 3% year-on-year, reflecting the decline in the value of the tokens traded. There’s also the fact that Coinbase defines a ‘transaction’ so broadly as to include passively receiving rewards for staked tokens, which lumps in users who are no longer interested in actively trading.
Despite the narrative about crypto’s ongoing shift from Main Street to Wall Street, institutional trading volume fell 13% to $215 billion. However, institutional revenue rose 37% to $185 million, driven by lots of derivative liquidations at Deribit, the platform Coinbase acquired for $2.9 billion last year.
‘Other’ transaction revenue fell 6% to $63.8 million, with the decline blamed on “a reduction in instant transfer activity amidst softer market conditions.” This reduction was offset by “increased” revenue from Base, Coinbase’s Ethereum Layer-2 network, but Coinbase offered no specifics as to the size/scope of this increase.
Stablecoins (one of them, anyway) rock Coinbase’s world
Coinbase’s ‘subscription & services’ segment reported revenue falling 3% from Q3 to $727.4 million, of which just over half ($364.1 million) came from stablecoin revenue. That stablecoin figure represents a modest $9.4 million improvement from Q3 but still a new all-time high for this segment, and it pushed 2025’s total stablecoin revenue to $1.35 billion, up nearly 50% year-on-year.
The returns from this all-time high total would have been even higher were it not for the Federal Reserve cutting interest rates twice during Q4, which reduced the revenue Coinbase earns from the U.S. Treasury bills it buys with its customers’ USDC.
Stablecoins represented nearly 19% of Coinbase’s overall revenue, which explains why the company is going to the mat over its right to continue offering ‘rewards’ to its customers for holding USDC on the exchange. Simply put, if Congress bends to the banking sector’s desire to prohibit companies like Coinbase offering these rewards, the company’s financial math no longer works.
Coinbase held $17.8 billion worth of customers’ USDC on its platform during Q4, up 18% from Q3. Thanks to an exceptionally favorable arrangement with Circle, Coinbase also earns a cut of USDC held off its platform, and those off-platform balances were up 11% to $58.4 billion.
The off-platform USDC contributed a greater share ($192 million) of overall stablecoin revenue than the USDC held in ‘Coinbase Products’ ($172 million). Coinbase recently curtailed USDC rewards for its rank-and-file customers, reserving it for those who sign up for the Coinbase One subscription service (with ‘tiered’ monthly prices ranging from $5 to $300).
That shift helped drive Coinbase One to a new all-time high of ‘nearly one million’ subscribers, which helped boost ‘other subscription and services’ revenue to $151.7 million, up 6% from Q3 and another all-time high.
The bills come due
Coinbase’s expenses hit $1.5 billion in Q4, 9% higher than Q3 and more than a quarter-billion higher than the same period last year. The biggest contributors to this red ink surge were technology & development (yay!), sales and marketing (boo!), and general and administrative (yay and boo).
After enacting significant payroll purges following the ‘crypto winter’ that started in 2022, Coinbase’s staff count has been inching up, and hit 4,951 warm bodies at the end of Q4. That’s more than 1,200 staff added over the past 12 months, some of whom were likely added to Coinbase’s oft-criticized customer service team (more on this below).
Coinbase said total transaction revenue from the start of 2026 through February 10 amounted to $420 million, or roughly 43% of Q4’s total, around halfway through Q1. Coinbase is projecting Q1’s ‘subscription & services’ revenue to come in between $550-$630 million, so roughly 75%-86% of Q4’s total.
Coinbase shares opened Thursday at $153.20, barely a third of the value they held last July. The shares closed Thursday down 8% to $141.09 and have now shed over one-third of their value since the year began. However, shares nudged up 1.3% in after-hours trading, so onward and upward, assuming BTC, ETH, and other major tokens cooperate.
Don’t mention the war (or Voldemort)
In a curious move, instead of answering questions from analysts live on the earnings call, Coinbase required analysts to submit their questions in writing in advance, then responded to some of these questions without any analysts on the call. This unusual format, which eliminated both the element of surprise as well as any follow-ups, strongly suggests there were certain subjects company execs preferred not to discuss.
Those touchy subjects may have included Coinbase’s multiple mentions in the U.S. Department of Justice’s (DoJ) latest release of communications involving Jeffrey Epstein, the deceased investor/pedophile. These communications revealed that Epstein was an early investor in Coinbase, paying $3.25 million for nearly 196,000 shares in 2014, six years after it was public knowledge that Epstein had pleaded guilty to soliciting prostitution from a minor.
We’ll leave our coverage of the topics discussed on Thursday’s call for another day. Partly because there wasn’t really anything truly earthshaking discussed, but also because there’s a huge elephant in this room, and it seems intent on leaving some serious messes that somebody will eventually need to clean up. Just not today, apparently.
After two years of insider sales, I think they’re trying to tell us something
While Coinbase execs never stop proclaiming that crypto’s golden age is either already here or waiting just over the horizon, they don’t seem to apply that faith to their own portfolios. The day before Coinbase’s Q4 report, Van Eck analyst Matthew Sigel took Armstrong to task by tweeting the CEO’s penchant for dumping great quantities of his COIN stock.
Armstrong is hardly alone in this scenario. Over the past three months, Coinbase insiders have made 126 sales totaling $186.6 million with zero buys between them. Extend that window to six months, and there are 238 sales totaling $351.5 million, with zero buys. Zoom out a full year, and there are 444 buys totaling $860.5 million and—again—zero buys. Zoom out two years, and there are 1,687 sales totaling nearly $2.1 billion and—wait for it—zero buys.
Armstrong alone accounted for 426 of these share sales, collecting over $1.2 billion over the past two years. Admittedly, many of these sales are planned long in advance as options vest and the share price hits certain benchmarks. Regardless, zero buys in two years across Coinbase’s entire senior executive ranks doesn’t exactly scream faith in the future.
In a somewhat related note, last month, a Delaware judge rejected Coinbase’s bid to dismiss a class action suit accusing Armstrong and other Coinbase execs/directors of using non-public information to avoid major stock-related financial losses.
The complaint, filed in Delaware state court in 2023, was based on the plaintiff’s allegation that Coinbase insiders knew the company was in worse financial shape than the public was led to believe ahead of its listing on the Nasdaq exchange in 2021.
Coinbase formed a Special Litigation Committee (SLC) that spent 10 months examining the facts of the suit and (surprise!) concluded that the defendants had done nothing wrong. But on January 30, Judge Kathaleen St. J. McCormick ruled that one of the SLC members had ties to Coinbase director Marc Andreessen (of Andreessen Horowitz fame), creating “an unacceptable risk of bias in a process where independence is paramount.”
A Coinbase spokesperson said the company was “disappointed” by McCormick’s ruling and Coinbase remains “committed to fighting these meritless claims in court.”
Your call is important to us. Your sell order? Not so much
Coinbase’s platform is notorious for routinely shutting down during high-traffic periods, though it appears significantly more prone to outages when customers are mass-selling rather than buying. And sure enough, as token prices began to tank on Thursday, Coinbase customers found themselves unable to access their accounts.
It’s been 18 months since Coinbase announced plans to incorporate AI tools to anticipate traffic surges before they occur. The idea was to inform the exchange’s engineers when it’s time to deploy additional resources to prevent service disruptions. But outages continue to happen, causing many to wonder exactly why Coinbase seems incapable of beefing up its shoddy architecture.
Coinbase just opened a new ‘customer experience center’ in Charlotte, North Carolina. Currently, around 150 staff are (probably) getting an earful from irate customers, and Coinbase says this team will grow larger over time. There’s likely a backlog of calls to wade through, as the company has nearly 9,200 complaints filed against it with the Consumer Financial Protection Bureau, about 1,200 more than the CFPB had logged last June.
They’re not laughing with you
Coinbase was widely mocked online for its 30-second commercial that aired during last Sunday’s Super Bowl. The mockery showed people at watch parties in bars and homes all gleefully singing along to the karaoke-style Backstreet Boys lyrics onscreen, only to groan/boo/curse the minute Coinbase’s logo appeared.
Coinbase claimed the negative reaction proved the ad was successful. Armstrong said the reaction indicated the spot’s “unique” qualities. But this ‘duh, winning’ reaction was equally mocked as an ‘I was saying boo-urns’ level of copium. Other wags superimposed Coinbase’s falling share price onto the Las Vegas Sphere venue’s LED screen that was featured in the ad.
Meanwhile, the U.K.’s ban on Coinbase’s ‘irresponsible’ videos depicting the country as a crumbling economic hellscape that can only be saved via its citizens buying digital assets has been upheld by the Advertising Standards Authority (ASA).
The ASA received 35 complaints over the ads, which aired online last summer, with viewers believing the spots “trivialized the risks of cryptocurrency and implied it was a solution to prevalent financial concerns.”
The ASA upheld the complaints, ruling that while the ad may have been satirical, it “risked presenting complex, high-risk financial products as an easy or obvious response” to financial problems. The ASA warned Coinbase not to disseminate the ads again and to ensure that future ads don’t imply similar solutions.
By the way, if you’d bought BTC at the time those ‘everything is fine’ ads aired, you’d have lost over 40% of your investment. A trivial loss, surely.
Information is free, lawsuits cost money
Last week, Coinbase and the U.S. Federal Deposit Insurance Corporation (FDIC) agreed to dismiss a court action Coinbase brought (via a proxy) against the agency. The suit targeted the FDIC for its alleged role in Operation Choke Point 2.0, a conspiracy theory claiming crypto firms were improperly ‘debanked’ under orders from the U.S. President Joe Biden’s administration.
In 2024, Coinbase enlisted the support of Maryland-based History Associates Inc. to file Freedom of Information Act (FOIA) requests with the FDIC and other federal agencies seeking any and all documents related to their ‘debanking’ claims.
On February 6, History Associates and the FDIC filed a joint status report in the U.S. District Court for the District of Columbia seeking a dismissal of the action. The report indicated that the FDIC was willing to (a) pay $188,440 to cover History Associate’s legal fees and (b) overhaul the FDIC’s record-keeping and disclosure practices to ensure a speedier and more complete response to future FOIA requests.
Under its new Trump-appointed leaders, the FDIC and other federal agencies have effectively eliminated most of the guardrails that the crypto sector claimed were improper and unwarranted. This climbdown occurred despite all the evidence to date suggesting banks were simply exercising caution when dealing with a largely unregulated sector that had recently undergone numerous frauds, bankruptcies, and other scandals. The string of bank failures that plagued those financial institutions that chose to fully embrace crypto didn’t do much to bolster the sector’s ‘unfair’ narrative.
Nevertheless, Coinbase’s chief legal officer, Paul Grewal, celebrated the FDIC’s retreat, saying “the years of litigation were worth it” because it (allegedly) provided “indisputable proof of OCP2.0 and the coordinated effort to sideline the industry.”
Aussie banks tell Coinbase that AML isn’t optional
Debanking evidently wasn’t just a Joe Biden thing. Coinbase recently accused Australian banks of failing to rectify their longstanding practice of limiting access to crypto operators.
The Australian Financial Review quoted a Coinbase submission to the country’s House of Representatives Standing Committee on Economics that claims the practice of Aussie banks giving crypto the cold shoulder has “evolved from a sporadic operational anomaly into a systemic feature of the Australian financial landscape.” Coinbase claims this activity is “not merely an inconvenience; it is a threat to competition.”
Coinbase claimed the ‘big four’ Aussie financial institutions— Commonwealth Bank, Westpac, ANZ, and National Australia Bank—”have implemented policies that impede people’s abilities to use their own money, and remove banking facilities from consumers and businesses.”
Coinbase claims these policies have “disproportionately targeted the fintech sector and those utilizing digital assets and blockchain.” But banks have counterargued that they’re only trying to implement standard anti-money laundering/counter-terrorist financing procedures, areas in which crypto platforms have historically proven woefully inadequate. Scams, particularly the crypto-related pig-butchering variety, have become a serious threat, costing Australians $335 million last year.
Australian Banking Association CEO Simon Birmingham said Australian AML/CTF laws are there for a reason, and “if crypto platforms are struggling with being held to the same standards as financial services providers, then they need to be looking at their approaches, not asking others to lower the standards.”
Much as it has done stateside, Coinbase has been putting its thumb on this scale, opening its wallet to convince Aussie politicians that it’s on the side of the angels. Coinbase doled out $230,000 during Australia’s 2025 federal election, nearly half the total contributed by the crypto sector during the campaign.
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