Analysts have mixed views on Coinbase's revenue pressure and derivatives expansion

Coinbase Quarter 1 revenue fell 12% quarter-on-quarter to $2.03 billion, trading revenue fell nearly 19%, and several analysts cut their second-quarter and full-year revenue forecasts. JPMorgan noted a "30% quarter-on-quarter decline in institutional volume" and a 3.1 basis point decline in institutional expense ratios from 4.1 basis points. However, Coinbase's acquisition of Deribit, the world's leading crypto derivatives exchange, for $2.90 billion was considered a "bold bet in the derivatives space". Bernstein called the valuation "reasonable" and Canaccord believes the deal will "set the stage for U.S. regulatory approval of crypto options". In addition, subscription and services revenue rose 9% to $698 million, and USDC balances on Coinbase rose nearly 50% to $12.30 billion, driven by USDC adoption. Canaccord says its "Coinbase as a service" strategy "hedges against trading cycle volatility," and Coinbase is still considered the "gold standard" in the digital asset space.