Coinbase reported a surprise GAAP net loss of $667 million in its fourth-quarter 2025 earnings released on Feb. 12, missing Wall Street expectations with revenue of roughly $1.78 billion and a loss per share of $2.49 as declining trading volumes and non-cash accounting charges on its crypto portfolio combined to drag results well below analyst projections.
What Happened: Surprise Quarterly Loss
The exchange's transaction revenue fell significantly year-over-year as Bitcoin (BTC) and other major tokens declined sharply during Q4, dampening retail participation and trading volumes across digital asset markets. A substantial portion of the reported loss came from unrealized markdowns on Coinbase's crypto investment portfolio and strategic stakes, including its position in Circle, which dropped roughly 40% quarter-over-quarter.
CEO Brian Armstrong struck an optimistic tone despite the numbers.
"2025 was a strong year for Coinbase, and we built a solid foundation for continued growth in 2026," he said, pointing to expanded market share, growing trading volumes year-over-year and multiple products now generating more than $100 million in annualized revenue. COIN stock was trading at $140.97 as of Feb. 12, down more than 45% year-to-date.
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Why It Matters: Cyclical Vulnerability Exposed
The results underscore how sensitive crypto-linked equities remain to market downturns, even as Coinbase has worked to diversify into custody, derivatives and subscription services. Subscription and services revenue proved relatively resilient compared with trading fees, but critics point to a 45% drop in consumer transaction revenue and a weak near-term outlook as signs the company has not yet escaped its dependence on volatile retail trading cycles.
The quarter also arrived amid broader pressure across the crypto sector, with several exchanges reporting declining revenue and layoffs in recent weeks.
Coinbase's trading struggles come as decentralized competitors gain ground.
Hyperliquid (HYPE), an on-chain derivatives platform, recorded roughly $2.6 trillion in notional trading volume — nearly double Coinbase's $1.4 trillion, according to analytics firm Artemis, which published the comparison on Feb. 9. The gap extends beyond raw volume: Hyperliquid is up 31.7% year-to-date while COIN is down 27%, a 58.7% divergence that underscores the growing competitive pressure from decentralized trading venues on centralized exchanges.
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