Earlier this week, TechCrunch’s Equity podcast noted the chaotic price movements of crypto assets and predicted Coinbase’s earnings later this week could either smoothen or further complicate the path forward for startups in the web3 ecosystem. If Coinbase reported strong numbers, it could calm some concern about another crypto winter, the logic went.

That didn’t happen.

Last night, Coinbase’s first-quarter earnings report sent its already depressed stock plummeting, causing the former public-market darling’s shares to fall further beneath the $100 per-share mark. That’s far, far below the $368.90 all-time high the stock touched last year.

Today, Coinbase’s stock opened at just $54.66, down 25% from yesterday’s close.

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This morning — as UST burns and other crypto assets, like the newly launched ApeCoin, face extreme selling pressure — we’ll examine Coinbase’s results and what went wrong with its business in the first quarter.

Crypto bulls will dismiss any criticism of the company’s performance as a blip in the larger progression of crypto. For the rest of us, the report makes for a useful lens for scoping the current state of the consumer crypto market. Let’s go!

Fewer users + more costs = big losses

In the first quarter, Coinbase’s revenues dipped 27% to $1.17 billion from a year earlier, and operating expenses more than doubled to $1.72 billion. The huge step-up in spend was partially because of the company’s much larger headcount — it had 4,948 full-time employees in the first quarter, up from 3,730 at the end of 2021 and 1,717 at the end of Q1 last year.

Coinbase, which also reported less revenue than it did in the fourth quarter, appears to be beset by a few major issues.