In a dramatic turn of events, Coinbase’s stock plummeted by 15.3% on Thursday, marking its worst trading day since July 2022. This steep decline came just a day after the U.S.’s largest publicly traded cryptocurrency exchange revealed third-quarter earnings that fell significantly short of analyst expectations.
With shares closing at $179.25, Coinbase’s year-to-date gain has now shrunk to a mere 3%. This drop is noteworthy as it represents the most substantial daily decrease since July 2022, when the stock experienced a staggering 21% decline. The broader market wasn’t spared either, with the Nasdaq Composite falling 2.76% and the S&P 500 down 1.86% at the close of trading.
Disappointing Earnings Weigh On Investor Confidence
Coinbase’s latest quarterly report showed a net income of $75 million, which was well below the anticipated target of $112.2 million, according to a survey by Bloomberg. While the company reported a year-over-year increase in net revenue, up to $1.13 billion, this figure was down from the $1.38 billion reported in the previous quarter. Such a decline suggests that despite a recovering crypto market, Coinbase is grappling with significant challenges that could impact its profitability moving forward.
The earnings miss has raised concerns among investors about Coinbase’s ability to navigate a competitive and often volatile cryptocurrency landscape. Key metrics such as net revenue and adjusted EBITDA have seen a dip, prompting a reassessment of the company’s financial health and future prospects.
Strategic Moves Amidst Market Turbulence
In an effort to instill confidence among shareholders, Coinbase announced a $1 billion share buyback program alongside its earnings report. This strategic move aims to signal the company’s belief in its long-term value and operational strength. However, the timing and amount of any repurchases will depend on prevailing market conditions, indicating that Coinbase remains cautious amid the current economic climate.
Despite the challenging market environment, Coinbase’s leadership expressed optimism about the company’s future, citing a more favorable political landscape toward cryptocurrency. “Both presidential candidates, as well as politicians across the political spectrum, have adopted more favorable positions toward crypto, a significant shift from previous years,” the company stated in its letter to shareholders.
Furthermore, Coinbase pledged an additional $25 million donation to the super political action committee Fairshake to support pro-crypto candidates ahead of the 2026 midterm elections. This move underscores the company’s commitment to advocating for policies that could benefit the cryptocurrency industry in the long run.
