Coinbase’s total fourth-quarter revenue came in at $1.8 billion, falling short of the expected $1.83 billion, while trading revenue also missed the $1.02 billion estimate by reaching $983 million, resulting in the company failing to meet overall revenue expectations.

The results come after a drop in cryptocurrency prices reduced trading volumes and led to a decrease in the value of the company’s digital asset portfolio. Coinbase shares have lost approximately 37% of their value since the beginning of the year.

The weakness in the markets has been particularly evident, with Bitcoin falling by approximately 50% since its peak in October. This decline has sidelined a large portion of individual investors, leading to speculation that a cycle similar to previous crypto bear markets may be repeating itself.

Coinbase management, however, argues that they entered this cycle better prepared than in the past. In recent years, the company has been trying to reduce its reliance on spot trading revenue.

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One of Coinbase’s most critical revenue streams comes from stablecoins. A significant portion of the company’s revenue is derived from revenue sharing associated with USD Coin (USDC), issued by Circle Internet Group Inc.

Needham analyst John Todaro stated that stablecoin revenues are more predictable compared to high-margin, volume-based commissions, suggesting that this business segment could provide significant support to the company in 2026.

However, the stablecoin bill being negotiated in Washington could restrict exchanges from offering rewards on users’ stablecoin balances. This could directly impact Coinbase’s revenue-sharing model with Circle.

In January, CEO Brian Armstrong withdrew his support for the bill. It was also reported that company representatives and banking sector officials held two separate meetings at the White House.

*This is not investment advice.

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