GoKawiilA screen showing the price of various cryptocurrencies against the US dollar displayed at a Crypto Panda cryptocurrency store in Hong Kong, China, on Monday, Feb. 3, 2025.
Crypto companies spent years monetizing volatility, but now, they're trying to survive without it.
First-quarter earnings underscored that crypto's era of easy moonshots and hype-driven returns is fading. As lower bitcoin and ether prices drained speculative demand – and investors pulled back from risk assets broadly amid macro uncertainty – trading activity across exchanges cooled and retail participation faded. The slowdown showed up in public companies' quarterly updates, with exchanges, brokers and crypto financial firms reporting weaker transaction and staking revenue and softer client activity.
It's nothing new to Coinbase and Robinhood , for whom trading was once the lifeblood of their platforms. Both have been working for years on diversifying revenue by expanding their suite of financial services.
But even non-trading businesses still operate in an industry shaped by crypto's boom-and-bust cycles. And first-quarter earnings – particularly from the batch of companies that joined the public market last year – showed a greater urgency to prove they can generate steady revenue even when prices and volumes are in a slump.
"For many years, [investors] rode that wave of crypto craziness … it was a new avenue for people to go out and trade," said Vassilis Tziokas, vice president of growth at Matter Labs. "But we're now seeing crypto becoming something bigger, something which is intertwined with the real economy, which means that people have high expectations of those companies. They need to diversify their revenue, they need to grow their operations to new adjacent verticals."
Robinhood kicked off the crypto earnings season, delivering a notable miss as crypto trading revenue collapsed by 47%. Meanwhile, user activity shifted toward other products – particularly event contracts – driving the segment up 320% year over year to bring $147 million in revenue.
Similarly, while Coinbase's top and bottom line missed expectations, it saw promising growth in its diversified offerings, including event contracts, crypto derivatives (which recorded a 169% increase over the same period a year ago) and tokenized commodities.
"We're trying to diversify the things that people can trade so that as markets shift, as different behaviors shift, we'll always have something that people want to trade," Coinbase CFO Alesia Haas told CNBC. "That diversification will help tamp down some of the volatility we've seen from pure crypto-only trading."
Diversified trading and infrastructure
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