Coinbase swings to surprise loss amid crypto exodus, but says traders are buying the dip

By Bill Peters

Stock bounces off a two-year low as it looks to ease investor worries amid a sharp crypto selloff

Coinbase reported quarterly earnings on Thursday, and the stock bounced even after the results included a surprise loss.

Cryptocurrency exchange Coinbase swung to a loss during the fourth quarter amid an ongoing flight from cryptocurrencies, but its stock bounced off a two-year low as the company tried to project optimism about more ways to trade on the platform - including via prediction markets.

Chief Financial Officer Alesia Haas said on Coinbase's earnings call late-Thursday that the year had begun with even more volatility. But she also said that "those who are in the market, they're buying the dip."

The stock (COIN) rallied 5.7% in premarket trading Friday, after closing the day before at the lowest price since Feb. 13, 2024.

Coinbase said after Thursday's closing bell that it lost $666.7 million, or $2.49 a share, during the fourth quarter, compared with a per-share profit of $4.68 in the prior year's quarter. Analysts polled by FactSet expected a $1-per-share profit.

The company reported revenue of $1.78 billion, which was down 21.6% from a year ago. That was below Wall Street's estimates for $1.81 billion, according to FactSet.

Management said that through Feb. 10, Coinbase had generated around $420 million of transaction revenue, and that they expect $550 million to $630 million in subscription and services revenue for the first quarter.

The results arrive amid an exodus out of bitcoin (BTCUSD) and other cryptocurrencies, following a retreat from institutional investors and greater caution around the economy. The company tried to ease investors' worries by saying the recent crypto selloff - bitcoin has tumbled about 25% this year, after shedding 23% in the fourth quarter - will soon pass.

"Crypto is cyclical, and experience tells us it's never as good or as bad as it seems," the company said in a letter to shareholders.

Meanwhile, more trading and betting platforms are trying to offer more ways to trade and bet, including via prediction markets, following the rise of prediction platforms like Polymarket and Kalshi. Those sites have attracted greater legal scrutiny.

CEO Brian Armstrong said during Thursday's call that crypto adoption continued to expand and that regulations had gotten clearer. And he said that Coinbase had diversified its business to allow trading of things like stocks, commodities and prediction markets.

Coinbase's remarks about prediction markets echoed those this week from Robinhood Markets (HOOD). Robinhood CEO Vlad Tenev predicted a "super cycle" in the segment, which it is also trying to expand. DraftKings (DKNG) on Thursday said its outlook, which sent shares reeling after hours, reflected "expected investment in DraftKings Predictions" among other things.

Coinbase's results also came on a day when there was an outage on its site, with some customers briefly unable to buy, sell or transfer on the exchange.

The stock was set to snap a three-day losing streak on Friday, and post just its third gain over the past 19 sessions. Through Thursday, the stock had tumbled 27.6% in February, after dropping 43.4% over the previous three months.

-Bill Peters

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02-13-26 0633ET