Coinbase’s $2.9 Billion Gamble: Did Crypto Just Call Its Therapist?

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What you probably didn’t need to know, but here it is anyway:

  • Coinbase’s Q1 revenue fell short—like my attempts at adulting. April trading volumes hint at a rough Q2. Somebody get COIN a stress ball.
  • Wall Street: Split like a bad group project. Some analysts see doom, others love the “spicy move” of buying Deribit for $2.9 billion. Derivatives: now with extra drama.
  • Stablecoin revenue and good ol’ crypto infrastructure are saving the day. In other news, your mom might understand what a “custody trade” is before I do.

So, Wall Street had a book club and Coinbase’s Q1 results were this month’s “Moby Dick.” Half the analysts just want to throw the book at it, the other half are obsessed with the whale (Deribit acquisition, for those still sober). Earnings fell short, but at least there was a $2.9 billion shopping spree to distract from the numbers. Because when your revenue’s down, what better pick-me-up than high-stakes retail therapy? 💸

Barclays did their best “meh” impression, noting that stuff was kinda soft, but hey, “trading share gains!” like a parent complimenting your finger painting after you failed Math. Meanwhile, Coinbase’s U.S. exchange revenue dropped 12% (ouch), with transaction revenue going down almost 19%. Analysts, including the ones who sound like law firms (looking at you, Keefe, Bruyette & Woods and JPMorgan), lowered their forecasts, blaming lower fees and what can only be described as institutional ghosting.

Retail traders are holding on like someone still using Yahoo Mail, but institutions bolted. JPMorgan raised an eyebrow at those missing institutional fees—now at 3.1 basis points, down from 4.1—which apparently means something if you speak Finance.

Then there’s the $2.9 billion Deribit acquisition, which analysts labeled “bold.” Or, as I’d say, “Yikes, hope they kept the receipt.” Bernstein loved it, calling the deal “fair” for an exchange doing $1.2 trillion in annual volume. Canaccord is all in, and apparently betting Coinbase will end up hosting the cool party when (if) U.S. regulators finally RSVP to crypto derivatives.

Trading revenue is basically playing hide and seek, so Coinbase is trying out new hobbies: subscriptions! Services! Infrastructure! (If crypto doesn’t work, maybe they’ll start a podcast?) Subscription revenue is actually up 9%. Thanks, stablecoins. Apparently, USDC balances on Coinbase are closing in on the GDP of a small country. Good thing Canaccord is tracking those numbers, because I’m still counting on my fingers.

This “Coinbase as a service” idea—making crypto infrastructure for the masses—is Wall Street’s new crush. They say it’ll stabilize revenue, because if you can’t predict the market, at least you can build the internet’s plumbing and charge rent.

Of course, the macro stuff is still a “choose your own anxiety adventure,” with tariffs, crypto mood swings, and legislation that’s about as reliable as my 2020 planner. Regulatory progress is stalled, but JPMorgan reports that Coinbase management is still “optimistic.” (Somewhere, an intern just rolled their eyes.)

Bottom line: Coinbase is trying to win MVP while playing in a rainstorm. Records? Unimpressive. But they do bring snacks to the team party. And as Canaccord summed up: Coinbase remains the “gold standard”… assuming, of course, the gold price doesn’t drop 19% next quarter. 🤷‍♀️

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2025-05-09 20:39