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
Gemini, the crypto exchange founded and led by the Winklevoss brothers, is also making it a priority to stabilize revenue that otherwise swings with crypto prices by expanding into predictions, derivatives, and soon, stocks – and owning more of the financial infrastructure to do so in-house. The company also reported a 292% year-over-year jump in revenue tied to its consumer credit card in its earnings.
The goal is to shift “from a solely crypto-centric company to a company that’s more tied to markets … that should, on some level, smooth out our revenue,” Cameron Winklevoss, president of Gemini, told CNBC. “So if one asset class is underperforming another, it should even it out and give you a more indexed approach on these different asset classes.”
Shares soared on a more positive earnings report than Gemini’s peers, as well as an announcement of a $100 million investment into that future.
Bullish is another company tackling its revenue struggles with expansion plans. The exchange’s $4.2 billion planned acquisition of the global transfer agent Equiniti is among the biggest M&A deals in crypto history. With that, the company is positioning itself as a capital markets infrastructure company rather than “just” a crypto exchange. The stock rallied on the acquisition news, and later sold off on the earnings miss.
And although Circle is more insulated from trading volatility, it’s not safe from the crypto cycle, which still drives usage, liquidity and adoption of the USDC stablecoin. It reported a strong quarter, but its Arc blockchain, an operating system for the agentic AI driven economy, drew the most attention, easing concerns about its long-term viability as a stablecoin issuer. The stock surged about 20% and even cautious analysts raised their price targets on the shares.
Accumulators turned asset managers
Even crypto treasury firms, public companies whose sole purpose is to buy vast amounts of crypto to give shareholders exposure to it, are just as structurally bound to crypto cycles.
Michael Saylor’s Strategy provided the clearest example of this when it broke from its “never sell” bitcoin approach in favor of giving shareholders more of an active management flavor. Management announced the pivot on its earnings call, as Strategy reported a $12.5 billion net loss due to the slump in the bitcoin price.
“We will sell bitcoin when it’s advantageous to the company,” Phong Le, president and CEO of Strategy, said on the call. “We’re not going to sit back and just say, ‘We’ll never sell the bitcoin.'”
In bull markets, the Strategy way of issuing equity or raising capital to buy more bitcoin may be strategically easy, but in downturns, that playbook becomes riskier and puts some investors on edge.
In Sharplink’s earnings, the ether accumulator echoed the same theme when it made the splashy announcement that it’s enlisted Galaxy Digital to help it allocate some of its capital into actively managed on-chain strategies. Wall Street cheered the “disciplined” and “differentiated” approach to evolving as companies look to decouple investor returns from quiet markets.
