Trading Slows, But Coinbase Bets Big on Derivatives with $2.9B Deal
From Spot to Options: Coinbase Reshapes Strategy Amid Market Shifts
Coinbase Q1 Revenue Drops Despite Bitcoin’s Surge — Derivatives Take Center Stage
Coinbase, the top U.S. crypto exchange, saw its first-quarter revenue dip by 10%, landing at $2.03 billion—missing Wall Street expectations of $2.2 billion. While Bitcoin flirted with the $100K mark, that price action didn’t translate into higher trading volumes.
Trading activity lagged, with transaction revenue falling short at $1.26 billion, lower than the projected $1.33 billion. The platform continues to feel the effects of retail hesitation and cautious institutional behavior despite an overall market recovery.
But not all was gloomy—stablecoins were a bright spot. Coinbase's USDC product saw a 49% jump in average balances and 32% quarter-over-quarter growth in revenue, signaling deeper engagement in the stablecoin economy.
On the flip side, rising costs put pressure on profits. Operating expenses climbed 51% year-over-year to $1.3 billion, fueled by heavier marketing investments and asset write-downs. This cut into the bottom line, with adjusted net income sliding to $526.6 million ($1.94/share) from last year’s $679.2 million ($2.53/share).
Big Moves: Coinbase Acquires Deribit for $2.9B
In a bold step toward expansion, Coinbase announced the $2.9 billion acquisition of Deribit, a top global crypto options exchange. The deal includes $700 million in cash and 11 million shares of COIN stock.
Deribit handled over $1 trillion in crypto derivatives trading in 2024. With this buyout, Coinbase aims to become a global leader in crypto options and futures, signaling a shift in its strategy to diversify revenue beyond spot trading.
CEO Brian Armstrong confirmed the move is part of a longer-term vision to evolve into a full-spectrum financial hub for crypto. The deal is expected to close later this year, pending regulatory clearance.
Why It Matters:
Investors are leaning into derivatives and stablecoin products, even as spot trading slows.
With U.S. policy slowly warming to crypto (especially under Trump’s vocal pro-crypto stance), exchanges are jockeying for global dominance.
Final Thought:
While Q1 results show a cooling in user trading, Coinbase is actively repositioning itself for the next phase of crypto evolution. If the Deribit acquisition closes smoothly, expect Coinbase to compete heavily in the booming derivatives space.
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