Coinbase Swings to $667M Q4 Loss as Crypto Portfolio Markdowns Bite

Coinbase reported a $667 million net loss for the fourth quarter of 2025, its first quarter in the red since 2023.

The loss, which was largely driven by non-cash write-downs on the company’s crypto holdings and strategic investments, landed far below analyst expectations and reversed a $1.3 billion profit from the same period last year.

Record Growth Metrics Masked by Portfolio Pain

Coinbase’s shareholder letter, published after market close, painted two divergent pictures of its 2025 performance. On the operational side, the company logged all-time highs in total trading volume ($5.2 trillion, up 156% year-over-year), crypto trading market share (6.4%, double the year before), and subscription revenue.

In the letter, the crypto firm stated that paid Coinbase One subscribers have nearly hit 1 million and that it now has 12 products generating over $100 million in annualized revenue.

However, fourth-quarter financials told a different story, with total revenue falling 21.6% year-over-year to $1.78 billion and missing consensus estimates of about $1.83 billion. Additionally, transaction revenue, the company’s core fee business, dropped 36% from Q4 2024 to $983 million. Adjusted earnings per share of $0.66 also came in below analyst forecasts, which ranged from $0.86 to $0.96, according to market commentator MartyParty.

Per Coinbase’s report, the primary culprit behind the GAAP loss was a $718 million unrealized markdown on the exchange’s crypto investment portfolio, as Bitcoin (BTC) and other tokens declined in Q4.

The company also recorded a $395 million loss on strategic investments, including its stake in Circle, the issuer of USDC, which dropped approximately 40% quarter-over-quarter. Ultimately, Coinbase ended the year with $11.3 billion in cash and cash equivalents.

Market Share Gains Face New Competitive Pressure

Recent data suggests Coinbase is facing rising competition, with analytics firm Artemis reporting that decentralized derivatives platform Hyperliquid processed $2.6 trillion in trading volume, nearly double Coinbase’s $1.4 trillion in the same period. Artemis also reported a sharp divergence in market performance this year, with Hyperliquid’s token up 31.7% while Coinbase shares were down 27% over the same stretch.

The company’s mixed quarter follows a busy 2025, where it joined the S&P 500, secured approval to operate across the European Union under MiCA rules, and completed major acquisitions, including Deribit. It also benefited from a legal win when the U.S. Securities and Exchange Commission (SEC) dropped a lawsuit against the firm.

Not all commentary has been positive, though, as shown by security researcher Taylor Monahan’s argument that user protection on Coinbase is still lagging, citing more than $350 million in preventable losses during 2025.

Nonetheless, the exchange has maintained that its strategy focuses on diversification beyond spot trading. It said it is building an “Everything Exchange” that includes derivatives, equities, and prediction markets, and it recently partnered with Kalshi to support event-based contracts. Whether that broader model offsets swings in crypto prices will become clearer in the coming quarters.

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