Coinbase Q1 2025 Financial Report: Profit Drops by 94%, Revenue from Bitcoin investment expansion and USDC promotion reaches $298 million

Coinbase's first quarter 2025 financial report shows a 24% increase in revenue to $2 billion, but a 94% decline in net profit to $65.61 million due to the $597 million in unrealized losses caused by the cryptocurrency market volatility. The company invested $153 million in Bitcoin, increasing its holdings to 9,267 coins. The issuance of USDC increased, and Coinbase generated $298 million in promotional revenue, emphasizing its crucial role in on-chain financial infrastructure.

Revenue Growth and Profit Decline Coexist

In the first quarter of 2025, Coinbase's revenue reached $2 billion, a 24% increase compared to the same period last year. However, net profit plummeted from $1.2 billion last year to $65.61 million, a drop of 94%. Earnings per share were $0.24, significantly lower than last year's $2.53. According to the company, the profit decline was mainly due to the volatility in cryptocurrency market prices, resulting in asset valuation losses and increased operating costs.

In terms of trading revenue, although it grew 17% compared to the same period last year, it fell 19% from the previous quarter to $1.26 billion. Institutional trading revenue dropped nearly 30% to $99 million, indicating a significant impact of market volatility on institutional participation.

Bitcoin Investment Expansion and Unrealized Losses

This quarter, Coinbase further increased its Bitcoin investment, investing $153 million as long-term holdings. As of March 31, the company held a total of 9,267 Bitcoins, an increase of over 30% from the 6,885 Bitcoins at the end of last year. Ethereum holdings also rose from 115,700 to 137,334.

However, the market value fluctuations of these crypto assets also brought financial pressure. Coinbase uses market value to assess its holdings, leading to an unrealized loss of $597 million this quarter. Additionally, due to the price volatility of crypto assets held for operations, the company recognized $34.4 million in operating costs.

By the end of the quarter, the total value of crypto assets held by Coinbase for investment was $1.3 billion, with an additional $598 million used as collateral. The company's total liquid resources reached $11.8 billion, indicating a certain resilience in its asset structure.

USDC Issuance Surge, Coinbase Gains Significant Promotion Revenue

The market size of the stablecoin USDC has grown significantly over the past year, from $33 billion to $60.8 billion. This growth was driven by institutional demand, expansion of on-chain applications, and active trading on the Coinbase International Exchange.

As the main promotion platform for USDC, Coinbase received $298 million in promotion fees from Circle in the first quarter of 2025. This figure continues the trend of $908 million for the entire year of 2024, highlighting USDC's importance in the Coinbase ecosystem.

Additionally, in February, Coinbase launched the USDC Boosted Rewards program, allowing users to hold USDC in perpetual contract investment portfolios and earn up to a 12% annualized return, further promoting USDC's on-chain circulation and application.

The Key Role of Stablecoins and On-Chain Economy

USDC is not only a medium of exchange but is gradually becoming the infrastructure for on-chain financial activities. Coinbase emphasizes the potential applications of USDC in retail lending and global remittances and continues to promote its integration into fintech scenarios.

According to data released by Coinbase, the average USDC balance grew 49% this quarter, reaching $12 billion. The USDC balance on the Base blockchain also rose to $4 billion, indicating its activity in the Ethereum Layer 2 ecosystem.

Financial and Operational Highlights

In addition to its core trading and asset management business, Coinbase's subscription and services revenue also showed steady performance this quarter, increasing 9% to $698 million. This revenue comes from value-added features such as Coinbase One subscription services, staking rewards, and tax assistance, reflecting the rising demand for non-transactional income sources.

Coinbase also continues to expand in institutional business, adding 39 new perpetual contracts on the international exchange and launching the Portfolio Margin 2.0 feature, enabling institutional users to use existing assets as collateral for leveraged trading, enhancing capital efficiency.

References

• Coinbase 第一季利潤暴跌，加碼買入比特幣，認列近六億鎂未實現損失 | 鏈新聞 ABMedia
• Coinbase reports Q1 revenue below expectations with 19% drop in transaction revenue - SiliconANGLE
• Coinbase Q1 revenues up 40% YoY to $2 billion, while net income down