Ethereum cools after hitting another new high on Sunday

Shares of Coinbase, the largest cryptocurrency exchange in the US, slid in after-hours trading after it missed analysts’ expectations for Q1 earnings.

The company reported:

• Total revenue of $1.4 billion, below the nearly $1.5 billion analysts polled by FactSet were expecting.

• Transaction revenue of $755.8 million, well below the consensus estimate of $808.1 million and a 40% decline from nearly $1.3 billion in last year’s period.

• A surprise loss of $394 million, a $1.47 loss per share for the quarter, compared to net income of $65.6 million in last year’s period.

The firm has 12 products generating over $100 million on an annualized basis, with prediction markets being one of its “fastest growing products ever, on track on become the 13th product,” according to Coinbase’s presentation.

The earnings report comes in the same week CEO Brian Armstrong announced the firm is cutting 14% of its workforce, or about 700 employees, citing artificial intelligence and the need to adjust its cost structure amid a down market.

Crypto markets are warming into a spring rebound as green shoots emerge in the sector.

Ethereum broke above $2,400 Wednesday morning, its highest mark since the end of January, with open interest across Binance, Bybit, OKX, Deribit, and Hyperliquid jumping to almost $12 billion from $10.7 billion on Wednesday morning, a sign new traders are opening positions, data from blockchain analytics firm Velo.xyz shows. 

Coinciding with the price action, institutional flows are positive, with ETFs seeing three straight days of inflows, totaling $260 million in the period, according to SoSoValue. 

“Crypto Spring, in our view, has commenced and like past cycles, investor sentiment and conviction are muted and bearish even as crypto prices strengthen,” BitMine Chairman Tom Lee said Monday, while announcing the firm added 101,745 ethereum tokens to its stockpile last week. 

Meanwhile, privacy and meme tokens are rallying, too:

• Dogecoin, adored by billionaire Elon Musk, has climbed as high as 11.7 cents, a level not seen since January. 

• DASH has increased 22.8% in the last 24 hours.

• Zcash, a privacy coin, rallied to a five-month high, breaking past $600 before settling at $574 as of 10:45 a.m. ET, a 33.3% surge in the same period.

Zcash’s upswing comes after Tushar Jain, cofounder and managing partner at investment firm Multicoin Capital, announced that it “built a significant position in $ZEC since February.” 

“We believe that truly private, censorship and seizure resistant assets have clear product-market fit and demand is accelerating… $ZEC is the cleanest way to express this thesis in public markets,” Jain said on X.

Shares of Hut 8 are up more than 34% in early trading on Wednesday on news the firm signed a $9.8 billion deal to lease its AI facility in Texas over a 15-year period to provide compute capacity for a “high-investment-grade” company.

While the tenant of Hut 8’s Texas data center campus remains confidential, the firm’s CEO, Asher Genoot, said in an earnings call that the tenant is not Anthropic nor Google.

The announcement comes on the same day the firm released its first-quarter earnings, which missed analysts’ expectations.

• The AI compute company and bitcoin miner reported Q1 revenue of $71 million, compared to the FactSet analyst consensus estimate of $78.4 million.

• Hut 8 also reported a Q1 net loss of $134.3 million versus a loss of $250.7 million for the prior year period.

“We continue to execute against our 2025 roadmap by advancing potential catalysts for topline growth, including the energization of Vega, the initial sitework at River Bend, and the development of our utility-scale power portfolio,” Genoot said.

“We believe these initiatives will further accelerate our ability to generate resilient near-term cash flows while building toward enduring leadership across next-generation digital infrastructure markets,” Genoot continued.

On Monday, Hut 8 entered into a $200 million bitcoin-backed credit facility with crypto prime broker FalconX, a move that not only replaces its prior arrangement with Coinbase but also reduces debt costs.

Bloomberg also reported last week that the company sold $3.25 billion of investment-grade bonds to finance the development of a turnkey data center tied to Google.