Coinbase Missed by 87%, Blew $2.9B in Dubai, and Called It a Win. Welcome to Crypto Finance.

Ever been so unprepared for a test you suddenly start acting like you’ve been best friends with the kid who color-codes his notebooks and voluntarily takes extra credit quizzes? It can’t be just me who’s done that… Anyways, that was Coinbase during earnings… wildly unprepared and praying Bitcoin would bail them out like the nerdy kid who’s too nice to say no.

Q1 was… let’s say underwhelming. They reported earnings of just $0.24 per share. For context, that’s down from $4.40 a year ago and about 87% lower than what Wall Street was expecting ($1.93). We’re talking the kind of miss that makes analysts say, “Huh. Maybe Gary Gensler is right.” Now I will say, revenue wasn’t a total flop… it rose 24% YoY to $2.03 billion, but that’s still below the $2.1 billion analysts had circled. And compared to Q4, it was actually down. I guess “number go up” only applies to memes and meme coins. But just when it looked like Coinbase might be heading for a sympathy candle vigil on TradingView… Bitcoin stepped in like a loyal golden retriever with a 6-figure price tag.

BTC broke $103,000 this morning (its highest point since February) after briefly hitting $104,300 overnight. It’s up 10% this year and 6% just this week, reminding crypto bros why they still have that “laser eyes” pic buried somewhere in their Twitter history. Anyways, back to Coinbase… the details don’t exactly inspire confidence. Transaction revenue (the bread and butter) clocked in at $1.26 billion, which was up 17% YoY but missed expectations by a solid $130 million. Consumer trading volume dropped 17% quarter-over-quarter. Institutions were only slightly better, down 9%.

And let’s talk about that “stable” subscription revenue Wall Street loves to parade around like it’s some kind of unbreakable bond. But it’s clearly got cracks. Coinbase pulled in $698 million from subscriptions and services in Q1… up from $641 million in Q4 and $511 million a year ago. Sounds decent, right? Until you remember that analysts were expecting $702 million, and Coinbase itself previously guided for $685M–$765M. Not only did they land at the low end, they basically hit the floor and kept digging. And just to keep the vibes going, Coinbase is already warning that Q2 will likely be worse… guiding between $600M and $680M. So yeah, that “predictable” revenue stream isn’t looking so predictable anymore, especially with April only generating $240 million in transaction revenue as crypto trading volumes dipped 12% month-over-month.

So… why isn’t the stock in full-blown freefall? Great question. Because Coinbase pulled a play straight out of the "Distract the Shareholders" handbook… announcing a $2.9 billion deal to acquire Deribit, the Vegas sportsbook of crypto options trading. This is the largest crypto options platform on Earth (based in Dubai, naturally) and it’s where degens go to risk their rent money on 50x-leveraged Bitcoin bets.

The deal includes $700 million in cash and 11 million COIN shares, worth about $2.2 billion as of right now. So yeah, Coinbase just bought the world’s biggest crypto options exchange using 75% stock… which is pretty much saying, “Trust us, our shares won’t tank... probably.”

Still, this is a power move. Deribit dominates the Bitcoin and Ethereum options market… and in a space where derivatives now make up 75% of global crypto trading volume, Coinbase just snagged the keys to the kingdom. VP Greg Tusar called it a play to make Coinbase “the most comprehensive player in derivatives.” Which sounds great… assuming their new customer base doesn’t YOLO themselves into bankruptcy.

Zooming out, Coinbase is clearly trying to morph into the Goldman Sachs of crypto. They’re building the financial plumbing: $212 billion in assets under custody, a growing stablecoin engine via USDC, and even crypto-backed loans baked into the app (with over $160 million in originations so far).

And USDC (a stablecoin that’s basically a digital dollar) is quietly becoming their MVP. It drove $298 million in revenue this quarter alone (a 32% jump from Q4) and now powers everything from staking rewards to ETF custody. So yeah… earnings were weak. Real weak. But Bitcoin hitting $103K softened the blow, and the Deribit deal gave investors something shiny to stare at while the fundamentals wobble.

Just don’t let Bitcoin slip. If that thing stumbles, Coinbase is going to need more than a crypto options platform to break the fall.

PS: It’s a mess out there.

One day the market’s ripping, the next day it’s Black Monday all over again. Recent earning’s reports have been a total coin flip. One stock beats and explodes 30%… the next misses by a penny and gets sent to the Shadow Realm. And through it all, everyone’s begging for Jerome Powell to finally cave and cut rates.

But underneath all the panic headlines (“Inflation too sticky!” “Recession imminent!” “Tariffs round 4 incoming!”) something wild is happening…

We’re seeing violent price action. Especially in the small-cap space, where low floats and high anxiety are creating the perfect recipe for 100%+ pops before lunchtime. Some of these names are moving 200%+ in under 24 hours… and to our knowledge, NO ONE else is covering them.

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Stock.News does not have positions in companies mentioned.