Coinbase Posts $394M Loss in Q1, Hit by 6-Hour Outage as Traders Lose Millions

• Advertisement -

• Coinbase reported its second consecutive quarter in the red, with losses hitting $394 million as this year’s bear market impacted spot trading volumes.

• The exchange has been affected by downtime at Amazon Web Services that left traders unable to access the platform for over six hours.

Coinbase recorded $394 million in net losses in Q1 as this year’s bear market significantly impacted its spot trading volume. In its Q1 earnings report announced on Thursday, the American exchange revealed a net loss of $1.49 per share, but said its share of the global crypto market had increased to a record high.

The company’s revenue for the first three months stood at $1.4 billion, a 21% drop quarter-over-quarter as spot trading took a big hit. Q1 was brutal for crypto, with the overall market cap dropping by $700 billion as every other major crypto was hit by bearish forces. A slight recovery in March was not enough to offset the losses.

Onchain is the new standard.

The world is moving into crypto, and Coinbase is at the heart of it.

Going live for our Q1 earnings call to share more.https://t.co/QtAzD7iLgY

— Coinbase 🛡️ (@coinbase) May 7, 2026

In Q4 last year, the company had posted a $667 million loss, or $2.49 loss per share. However, in Q1 last year, it had posted $66 million in net profit.

Despite the losses, the Coinbase management dismissed any concerns over the future of the exchange.

“…despite asset prices being down, Q1 marked the 12th consecutive quarter of net native unit inflows,” CEO Brian Armstrong said on an investors’ call.

He added:

We hit a new all-time high in USDC held in Coinbase products and saw 10x year-over-year growth in stablecoin transactions on Base. We’re also leading on the next frontier with over 90% of on-chain agentic transaction volume happening on Base.

Chief Financial Officer Alesia Haas further revealed that the company’s market share in the global crypto sector grew significantly in Q1 to hit an all-time high at 8.6%.

Armstrong’s Diversification Push

Coinbase has long relied heavily on spot trading, which is dominated by retail traders. This tends to be cyclical; during bull markets, retail trading surges, but when prices start dipping, like they did in Q1, the volume takes a nosedive.

Armstrong is pivoting the exchange from its retail dependence to cushion against market downturns, he said. This push is starting to take shape. In Q1, subscriptions and service revenue surged to $584 million, accounting for 44% of the exchange’s revenue. The company is also pushing into derivatives, with volume for this segment up 170% year-over-year.

Stablecoins are also emerging as one of Coinbase’s biggest revenue avenues. According to Armstrong, the exchange is now “the largest regulated stablecoin platform in the world.” In Q1, it hit a new all-time high in USDC it holds on its platform, with stablecoin transaction growth on its Base blockchain surging 1,000% year-over-year.

Armstrong stated:

USDC growth on our platform has hit another all-time high despite broader crypto market performance. We are the largest distributor of USDC with more than 25% of all USDC held in our products, and importantly, we capture about 50% of all USDC economics.

CFO Haas went on to reveal a critical detail about Coinbase’s partnership with Circle, the USDC issuer, stating that the contract between the two auto-renews every three years “into perpetuity,” and cannot be terminated by either party. Essentially, USDC will always be a product between the two companies despite Circle being viewed as the firm that owns the stablecoin.

Coinbase Hit By a 6-Hour Outage

Shortly after announcing Q1 results, Coinbase was hit by an outage that left traders stuck in trades and unable to close their positions.

The outage was attributed to Amazon Web Services, the market leading cloud services provider. According to the exchange’s Status page, it was hit by the outage at 18:00 PDT on Thursday (03:00 Central European Time).

Coinbase Exchange Has Been Down for Over Two Hours

Coinbase Exchange has been experiencing an outage for over two hours. Its status page says some users may be unable to trade or may experience degraded performance due to an AWS outage. Coinbase said its team is investigating,… pic.twitter.com/BitQ8Id446

— Wu Blockchain (@WuBlockchain) May 8, 2026

Amazon claimed that its data centers in northern Virginia had been hit by technical issues due to a sharp rise in temperatures and was working to boost its cooling systems. In the meantime, it was diverting traffic to other data centers across the US.

The Coinbase services were not restored until almost seven hours later at 00:49 PDT, May 8 (09:49 Central European Time). By then, traders had lost tens of millions of dollars after they were unable to complete their trades.

Image courtesy of Justin Wu on X.