Crypto Goliath Fumbles: Coinbase Buys Big, Investors Yawn 🍿

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Even the most earth-shattering news—an acquisition fit for legends’ tales—proved powerless to lift Coinbase higher in the market’s merciless gaze.

All That Glitters Is Not Crypto: The Ills of Coinbase Revealed

As a chilly Thursday afternoon drifted on, Coinbase (that great colossus of digital exchange, immortalized by its Nasdaq symbol COIN) witnessed its own shares begin a slow, mournful descent, much like an ornate carriage bogging in Russian mud. The reason? Quarterly revenues, alas, failed to meet the gilded hopes of analysts ensconced in their Moscow offices—er, Wall Street towers.

Not even the purchase of the mighty Deribit—a crypto derivatives bazaar so vast it could house all of Moscow’s gossip in a single whisper—could ignite investor euphoria. At $2.9 billion, the grandest sum ever laid upon a crypto deal, the news passed through the market like a hungry wolf passing through an empty village: leaving little behind, save a silence pregnant with suppressed laughter. Even Lord Bitcoin, cresting above $100,000 as if galloping across the steppes—an epic worthy of Tolstoy’s quill—could not thaw the investor’s frozen souls. No, the stock limped to $199.32 on Friday, a mere shadow, down 1.5%, as chronicled by the scribes at Yahoo Finance.

Coinbase, diligently toiling through the eternal winter, scrabbled together $2.0 billion in revenue. Yet its net income for the quarter: a mere $66 million. One year ago, the bounty had been $2.27 billion in revenue and $1.2 billion in coin—nay, loot—fit for an oligarch’s feast. The shareholder letter, a literary work perhaps destined for school curriculums, tells the tale in somber detail.

(Coinbase missed analyst estimates by 87.46% / Yahoo Finance)

The true culprit in this drama? A sorrowful decline in transaction revenue, Q1 2025 fading like an old soldier when compared to Q4 2024. Of course, what is a tragedy without company? According to Alesia Haas, Chief Financial Officer—and surely, a woman who knows suffering—this was an ailment spreading far beyond Coinbase’s manor. Yet, comfort comes not to those who lose less than their neighbors. Wall Street’s oracles had foreseen $1.91 in earnings per share, but only $0.24 emerged, as pale and trembling as a ghost at a banquet, falling short by 87.46%—a number one might associate with a particularly bad harvest or a recipe gone horrifically wrong.

“Let me begin with our transaction revenue,” intoned Haas on Thursday’s conference call, her words echoing through the stately halls. “We counted $1.3 billion—a reduction of 19% quarter over quarter. The world, it seems, managed a fall of 13%, but Coinbase, in its tragic glory, managed only 10%.”

Rebates and other blandishments—like a great feast thrown to entice peasants to the lord’s estate—have lured new traders, but these efforts, though festive, have not plumped Coinbase’s coffers. The mighty acquisition of Deribit reveals that the ambition is for growth, not profit—not yet. One might say they are planting potatoes in the hope of vodka next year, while this year’s pantry sits rather bare.

Brian Armstrong, CEO, addressed the assembly with the optimism of Pierre at a particularly somber dinner party: “We have posted strong financials”—(the candles flicker)—“innovated at speed, and seized market share, here and abroad.” He assures us, with the charisma of a man balding nobly on the battlefield, “We are financially better placed than ever to seize the opportunities that the inscrutable year 2025 may afford.” Whether the market, like old Count Rostov, believes in better days ahead? That, dear reader, history has yet to judge. 😊

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2025-05-10 17:07