Coinbase (COIN) fell short of Wall Street expectations in the fourth quarter as softer trading activity and weaker crypto prices weighed on performance.
The company reported total revenue of $1.78 billion on Thursday, missing analyst estimates of $1.83 billion. Further, adjusted earnings per share for the quarter came in at $0.66 compared with the expected $0.86.
Increased market volatility and reduced investor participation resulted in fewer transactions for the exchange, causing a key revenue driver to slump.
The fall in revenue has dented overall results for the exchange, in tandem with peers like Robinhood, which reported a disappointing result just earlier in the week.
The miss highlights how closely Coinbase’s financial health remains tied to crypto market cycles: when prices cool and traders step back, exchange earnings tend to take a hit, even as the company continues to expand its broader services and long-term strategy.
Coinbase overall result
Coinbase is feeling the slowdown where it hurts most, i.e. trading. Transaction revenue came in at $983 million, missing forecasts and dropping from both last quarter and last year as traders stayed cautious.
The brighter spot, however, was subscriptions which came in at $727.4 million, a slight dip from Q3 but still stronger than a year ago, showing the company’s push beyond trading is slowly paying off.
On the other hand, early Q1 numbers hint that activity is still muted, with about $420 million in transaction revenue so far. Looking ahead, Coinbase expects subscription income between $550 million and $630 million, a steadier, more predictable cushion while markets remain choppy.
Coinbase still hopeful for its future
Coinbase said that even though the market is still volatile, they are still confident about the long-term future of the crypto industry.
The company said that crypto markets are cyclical, with times of fast growth often followed by slowdowns. This means that things are rarely as strong or weak as they seem right now.
The exchange also claimed that even though asset prices keep changing, technology is steadily improving and more people are using their products.
The exchange stressed that innovation and finding new real-world uses for cryptocurrencies are still the main factors that will drive the sector’s growth in the future, even when trading is slow and investors are feeling less positive.