The Coin base (Nasdaq: Coins) Digital Asset Exchange announced an acquisition of Blockbuster on the same day as it issued a thorough overwhelming performance report. TUR timing, it.
Figures released on May 8 show Coinbase generated revenue of $ 1.96 billion during the three months ended March 31, a decline of 10% from Q4 2024’s $ 2.2 billion. The profit took a much more punitive here and fell from almost $ 1.3 billion in the fourth quarter to just $ 66 million in the first quarter.
The downturn reflects both the irrational abundance that swept across the Crypto sector in the wake of Donald Trump’s election in November to a second term of office as the United States: When he stopped his final linenot theirs.
Transaction revenue was one mainly suspected in Coinbase’s Trimestris horriblealmost a fifth from the fourth quarter falls to $ 1.26 billion. Consumer transaction revenue decreased by $ 18.6% to $ 1.1 billion, while institutional trade fell 30% to $ 99 million. Transaction fees from Coinbase’s Ethereum ‘ Network 2 ′ Base was practically unchanged from the fourth quarter to $ 67.8 million (more about base below).
Coinbase’s monthly transactions (MTU) numbers were also unchanged at 9.7 million. Although it is in mind that Coinbase’s definition of “transaction” is extremely wide, including those who passively earn rewards from making assets on the platform. However, Q1’s spot trade volume decreased by 10% from Q4, so even those who actually traded did not do so with Gusto.
When these customers traded, they seemed to be well and really over the Memecoin madness. The speculative tool -free tokens that were lumped under “other crypto assets” accounted for 48% of Q4’s trade volume, but it fell 10 points to 38% during the first quarter. Memecoin trade income Fell even harder, down 13 points to 36% of total transaction revenue.
BTC and Ethics Trading volume and income statistics were practically unchanged from Q4 to Q1, while Peak Market leading USDT Stablecoin Saw his volume dip two points to 13%. For the first time coinbase broke out Ripple Labs’ The XRP token as an independent category, which shows 11% of the volume and 18% of revenue.
XRP enjoyed A sudden price increase At the end of the fourth quarter, for reasons no one seemed to be able to explain, although there were rumors about XRP whales that traded a storm on Coinbase at that time. XRP’s Fiat Price hit a $ 3.40 top in January but struggled to stay over $ 2 when Q1 finished.
Money for nothing and your USDC free
Coinbase segment “Subscription & Services Revenue” did much better during the first quarter and increased almost 9% from Q4 to $ 698 million. That win was almost entirely due to Stablecoin revenue, alias the exorbitant privilege that Coinbase enjoys from its business with USDC Stablecoin issuer Circle.
Coinbase’s Stablecoin revenue grew almost a third from Q4 to $ 297.5 million, which reflected a similar large increase in USDC’s market value during the first quarter. Circle’s latest Initial public offer showed that coinbase in principle earns almost as much money through USDC than the circle.
The USDC’s market value is currently almost $ 61 billion, of which $ 12.3 billion “was held in Coinbase products” at the end of the first quarter, an increase of 49% from Q4. Coinbase said that this wave was “driven by long -term efforts to better integrate USDC over our product experience and our reward program.” Coinbase said it “continues to be satisfied with our long-term partnership with Circle and the growth of the USDC ecosystem.” No fun.
In the revenue call, Coinbase CFO Alesia Haas was asked about Circle’s latest Manage the Binance Exchange And how it can affect Coinbase’s business with the USDC ministry.
Haas first posted the favorable/predator arrangement that Coinbase has with Circle, and then added that “we then agree with Circle if we will share the economy with other distribution partners. When it comes to Binance, we agreed because we believe that it grows the overall USDC market.” Nice for Circle to have Coinbase’s permission to do business with other companies, right?
Blockchain Rewards Revenue – aka Coinbase customers that bet ETH to validate Ethereum Network’s insert property
Transaction Consensus Mechanism – Fell $ 8.5% to $ 196.6 million. Revenue for interest and financing decreased by $ 4% to $ 63 million, while “other subscription and services revenue” (which includes the custody token for Wall Street’s BTC/ETH Exchange-Trade Funds) increased 4.7% to $ 141 million.
The Q2 outlook shows that Coinbase started the quarter on an acidic note, with April’s transaction revenue to just $ 240 million, less than one fifth of Q1’s gloomy three months total. Revenue for subscription and services is estimated to come between $ 600 $ 680 million, so even in the high end it is below the Q1 figure.
Coinbase plans to hide $ 195 million in share -based compensation in the second quarter, up from $ 191 million in the first quarter. Because when your vision is gloomy, these C-costume needs extra motivation, dusty. Speaking of, CEO Brian Armstrong received 25,000 class A shares on May 5 and liquidated all his windfall The same day for about $ 5 million. But not you Sell your coinbase shares, children. You never know, they can be worth something one day.
President
Compared to the first quarter of 2024, Coinbase’s operating costs increased more than a third to $ 1.3 billion, with transaction costs up almost 40%, sales and marketing more than doubling and general and administrative costs that nail 37%. The increases are less drastic quarter in the quarter, but clearly, Flogging tool -free Digital hat children to Credulous Retail Suckers come at a cost.
However, rising expenses are just part of the reason why Coinbase’s Q1 win tumbled so hard. It seems that Coinbase’s fortune is married to the price of tokens as it continues with its balance sheet, and they took a serious tumbling during the first quarter. While they have regained much of the lost land since the quarter ended, it illustrates how much Coinbase’s end line depends on factors beyond its control.
Speaking of, US Securities and Exchange Commission (SEC) Published a letter Last month it sent to Coinbase in October last year and shouted exchange In principle, to fuck facts in their income reports.
SEC said Coinbase seemed to abuse Financial Accounting Standards Board (FASB) to report the value of digital assets. The change, which was announced in 2023 and which coinbase first implemented in its Q1 2024 reportallowed companies to report changes in “fair value” of the digital assets they held. Previously, companies were only allowed to register net losses on symbols they had, not gains and companies that did not adopt the new standard maintained this loss reporting.
FASB demanded companies to quote both the Gaap-compatible figures as well as their “fair value” adjusted figures and give a reconciliation of the two opinions. Instead, Coinbase used a set of figures when it favored their “adjusted results” results and another set when using the same standard made them look bad. SEC said this “has the effect of reversing your adoption of the new standard for your crypto assets held for investment.”
A quick reminder of the late Charlie MUSTER’s view that the real name of “adjusted revenue” should be “Bullshit revenue.”
Will
In the morning with their Q1 results, coinbase announced that it had spent $ 2.9 billion – $ 700 million in cash and 11 million shares of its ordinary share – to acquire Derivative exchange. (It’s almost as if the news was timed to direct people’s attention away from the financial flop. Cynical? Us? Pshaw …)
In March, Bloomberg Broken the story that Coinbase was looking to acquire the Dubai-licensed Deribbit. Bloomberg previously reported that Deribbit was able to raise a $ 4 billion price to $ 5 billion, so it is not clear why Coinbase could seal this deal for a significantly lower sum.
Deribbit has the world’s largest BTC and ETH alternative trading platform, which enjoyed a trade volume of $ 1.2 trillion in 2024, almost twice in 2023 in total. Coinbase said that the deal combined “Our strength in the future and place with Deribit’s industry -leading alternatives.” Coinbase further boasts that the expanded company makes it “the global leader in cryptoderivate through open interest and alternative volume.”
Two years ago, Coinbase launched a Bermuda-based derivative platform (Coinbase International) that cater for “non-American institutions in selected jurisdictions.” Coinbase’s Q1 report claimed that the company “operated $ 803.6 billion in global derivative volume” and its eternal future market share “increased over 60%” during the quarter.
However, Coinbase also acknowledged that the “other driver” of its institutional trade volume “was due to our derivative operations.” The downturn came from Coinbase, which offered too generous “discounts and incentives to build liquidity and attract (institutional) customers.”
At least Deribbit CEO Luuk Strijers alleged to be “excited to merge with Coinbase to drive a new era in global cryptoderivate.” Co -founder John and Marius Jansen will “leave the company” when the deal has officially gone to the Regulation Inspectorate later this year and ended the journey that started with Deribit’s launch in 2016.
The Coinbase shares increased by 5% on Thursday, largely due to the corresponding increase in BTC’s fiat price and the word for the Derbit business. However, shares withdrew by almost 3% in the post-retail when investors melted the Q1 figures.
Base: Lager 2, Step 1
Base, Ethereum ‘Layer 2 ′, which Coinbase launched two years ago, recently announced that it had reached’ Stage 1 Decentralization ‘aka’ Limited training wheel ‘through the launch of unemployed errors. Previously, the base stuck on ‘Step 0’, alias ‘full training wheel’, where validity checks are handled only by Coinbase. (Step 2 represents ‘no training wheels.’)
It has been two years since Coinbase promised to refrain from its monopolistic control over ‘sequencing’, aka validate transactions on the base. Earlier this year was coinbase the accused Transferring $ 110 million in base sequencing fees to the exchange, while only up to $ 10 million to Ethereum Mainnet. This served to echo the general belief that L2 rob Ethereum of fees it needs to survive.
Basic Association shot back Against this statement and claimed that Base only sent its ETH fees to Coinbase for “Offchain custody for security and audit reasons.” Not everyone bought this explanation, wondering Why Base did not seem to rely on its own network’s ability to safely store digital assets, such as asking base users to have the type of faith that its operators do not seem to share.
Look: Teranode is the digital spine in bitcoin
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