Crypto World

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

Published

5 hours ago

14 February 2026

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

Coinbase posted a $667 million Q4 2025 loss after crypto markdowns hit its holdings even though it registered record trading growth.

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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Crypto World

Prediction Markets Should Become Hedges for Consumers

Published

5 minutes ago

14 February 2026

NewsAdmin

Ethereum co-founder Vitalik Buterin said he is starting to “worry” about the direction of prediction markets and suggested that they shift to become marketplaces to hedge against price exposure risk for consumers.

Prediction markets are “over-converging” to “unhealthy” products that are focused on short-term price betting and speculative behavior as opposed to long-term building, Buterin said in an X post.

Instead, onchain prediction markets coupled with AI large-language models (LLMs) should become general hedging mechanisms to provide consumers with price stability for goods and services, Buterin said. He explained how this system would work:

“You have price indices on all major categories of goods and services that people buy, treating physical goods and services in different regions as different categories, and prediction markets on each category.

Each user, individual or business, has a local LLM that understands that user’s expenses and offers the user a personalized basket of prediction market shares, representing ‘N’ days of that user’s expected future expenses,” he continued.

Individuals and businesses can hold a combination of assets to grow wealth and “personalized prediction market shares” to offset the rising cost of living created by fiat currency inflation, Buterin concluded.

Prediction markets are useful market intelligence tools, supporters say

Prediction markets are crowdsourced intelligence platforms that can provide insight into global events and financial markets, while allowing individuals and businesses to hedge against a wide variety of risks, proponents of prediction markets say.

Prediction markets are more accurate than polls and should be treated as a public good, according to Harry Crane, a statistics professor at Rutgers University.