Coinbase swings to $842 million loss as crypto market crumbles

PORTLAND, Oregon – Coinbase Global showed how quickly a cooling crypto market can pressure even one of the industry’s most diversified exchanges.

The company swung to a fourth-quarter net loss of US$667 million (S$842 million) from profit of US$1.3 billion in the year-ago period after revenue tumbled a more-than-estimated 20 per cent to US$1.8 billion.

Falling token prices drained trading activity across digital assets and forced Coinbase to mark down the value of its crypto holdings. The stock is down nearly 37 per cent in 2026.

The results arrive as Bitcoin fell nearly 50 per cent from October’s high, a retreat that has left many retail traders sitting on the sidelines and revived comparisons with earlier crypto downturns. Those cycles have often forced exchanges to retrench quickly, and early signs suggest this one may follow a similar pattern.

Rival exchange Gemini Space Station said last week that it plans to cut up to 25 per cent of its workforce and scale back international operations, underscoring how rapidly weaker markets can translate into operational pressure. Kraken’s chief financial officer departed the exchange, which reported sequentially lower fourth-quarter revenue. Robinhood Markets said this week its revenue from crypto trading dropped 38 per cent.

Coinbase’s hope is that it is entering this downturn as a different company. Over the past several years, it has worked to reduce its reliance on spot trading, including the acquisition of the crypto options exchange Deribit and the recent launch of stock trading and prediction markets. Analysts are watching those businesses closely for signs they can provide steadier revenue through market cycles.

The most consequential shift, however, has been in stablecoins. A sizeable portion of Coinbase’s revenue came from revenue-sharing tied to USD Coin, issued by Circle Internet Group, a stream analysts view as higher margin and more predictable than transaction fees tied to trading volumes.

But that stability may now be under threat. Draft stablecoin legislation being negotiated in Washington could restrict exchanges from offering rewards tied to users’ stablecoin balances, a change that could directly affect Coinbase’s revenue-sharing arrangement with Circle. In January, Coinbase chief executive officer Brian Armstrong pulled his support from the Bill, although the company and the banking industry had two meetings at the White House to discuss a compromise.      

At Clear Street, analyst Owen Lau said recent price action and volumes resemble a mid-cycle drawdown rather than outright collapse.

“Absent renewed euphoria and new volume highs, current conditions appear more consistent with a mid-cycle pullback than a full crypto winter,” he wrote in a recent note. On the other hand, researcher Kaiko calls this the “halfway point of bear market”.

For Coinbase, the distinction matters. A short downturn would support the case that diversification and stablecoins can soften crypto’s volatility. A longer freeze would once again expose how difficult it is to fully separate exchange earnings from the market’s boom-and-bust cycles. BLOOMBERG