Crypto market winter drags down revenue! Coinbase turns from profit to loss in Q4, with a devastating loss of $667 million

American cryptocurrency exchange leader Coinbase (COIN) announced its earnings on Thursday. Due to a decline in the crypto market and cooling trading activity, Coinbase turned from profit to loss in the fourth quarter of last year, with a net loss of $667 million. Following the earnings release, Coinbase's stock price briefly fell to a nearly two-year low.

The earnings report showed that Coinbase's revenue for Q4 reached $1.8 billion, down 5% from the previous quarter. Trading revenue declined 6% quarter-over-quarter to $983 million; subscription and service revenue also fell 3% to $727 million.

Coinbase reported a net loss of $667 million for Q4, a significant weakening compared to Q3, when increased trading activity and higher Ethereum trading volume contributed to revenue growth. Coinbase stated that the loss was mainly due to unrealized losses on its cryptocurrency investment portfolio and poor performance of strategic investments.

According to CoinGecko data, as of the end of last year, the overall cryptocurrency market capitalization evaporated by $1.1 trillion, a decline of about 25%, following a correction in crypto prices. Entering the new year, market cap further shrank by approximately $700 billion, indicating ongoing capital outflows.

However, Coinbase Institutional recently noted that this correction has helped the market reprice and deleverage, leading to a healthier capital structure and laying a relatively solid foundation for 2026.

From a business structure perspective, retail trading revenue declined 13% quarter-over-quarter, partly because users shifted to the lower-fee "Advanced Trading" feature and increased subscriptions to Coinbase One, which compressed overall fee revenue.

Institutional spot trading volume also decreased, but institutional trading revenue increased, mainly due to strong derivatives performance, especially contributions from the recently acquired Deribit derivatives platform, which supported overall revenue.

Amid trading pressures, revenue related to stablecoins became one of the few bright spots. Stablecoin revenue for Q4 increased 3% quarter-over-quarter to $364 million. Despite lower interest rates compressing some earnings, the platform's average USDC holdings reached a new high, offsetting some of the impact.

By the end of 2025, Coinbase held $11.3 billion in cash and cash equivalents. The company also continued its share repurchase program, having bought back about $1.7 billion worth of stock as of early February.

After the earnings release, Coinbase's stock price fell about 4% in after-hours trading to around $135, hitting a nearly two-year low; later, buying interest returned, and the stock rebounded to around $147, resulting in a highly volatile day.

Notably, Coinbase CEO Brian Armstrong sold over $500 million worth of company stock in the past nine months. Coupled with recent weakness in the crypto concept stock sector, this has further amplified market concerns.

Coinbase stated that it will continue to promote its "Everything Exchange" strategy, extending into stock and ETF trading within the app, U.S. prediction markets, payment infrastructure, and strengthening its derivatives business.