AWS Outage Disrupts Coinbase Trading Hours
Coinbase faced a multi-hour disruption in crypto trading on Thursday after Amazon Web Services (AWS) suffered an outage in its U.S. Eastern Region, specifically Northern Virginia. The incident began when AWS reported increased temperatures at its use1-az4 availability zone, leading to cascading failures that impacted not only Coinbase but also other major platforms such as FanDuel. As a result, users experienced degraded performance and, for some, complete inability to transact across both web and mobile interfaces.
The outage forced Coinbase to switch its markets into “cancel only” mode—a state where new trades are halted and only existing orders can be canceled—until stability was restored. According to cointelegraph.com, AWS diverted traffic away from the affected zone and gradually brought cooling systems back online, while Coinbase assured customers that their funds remained secure throughout the disruption.
AWS’s official status page cited a temperature spike in the use1-az4 zone at 3:45 p.m. ET on Friday as the root cause of the incident.
Q1 Miss Sends Shares Sliding 5%
The technical setback came on the heels of disappointing financial results for the first quarter of 2026. Coinbase reported a net loss of $394.1 million, or $1.49 per share, sharply missing analyst expectations for a $0.27 profit. Revenue for the quarter landed at $1.41 billion—well below the consensus estimate of $1.52 billion—marking a significant reversal from the $65.6 million profit posted in the same period last year.
This earnings miss triggered a swift market reaction: Coinbase shares dropped more than 5% in after-hours trading on Thursday, settling below $184 per share. On paper, Coinbase’s global market share rose to a record 8.6%, but this did not translate into stronger financials as both transaction revenue and subscription services revenue fell short of expectations.
It’s unclear whether the AWS outage directly contributed to the quarterly miss or simply added fuel to investor concerns already heightened by declining revenues.
Service Restored After “Cancel Only” Mode
After several hours of limited functionality, Coinbase announced that trading had been fully restored following intervention by both its own teams and AWS engineers. The company placed markets in “cancel only” mode during the worst of the outage before gradually re-enabling full trading capabilities as cooling systems were repaired and affected server racks brought back online.
While customer funds remained safe throughout, some traders reported missed opportunities during periods of volatility—a reminder of how deeply exchanges rely on third-party infrastructure providers like AWS for uptime and reliability.
Workforce Cut by 14% as Losses Mount
Coinbase’s operational challenges extend beyond technical hiccups. On May 5, the company announced it would reduce its workforce by 14%, eliminating roughly 660 jobs in response to what it described as “negative market conditions and AI challenges.” This marks the second consecutive quarter of losses for Coinbase, following a $667 million deficit in Q4 2025.
Transaction revenue fell by 40% year-over-year in Q1, with subscription and services revenue also dropping by 13.5%. Despite these declines, derivatives trading showed resilience: trailing 12-month volumes surged 169% compared to last year, and retail derivatives revenue surpassed an annualized run rate of $200 million for the first time. The company’s Base blockchain also processed 62% of global onchain stablecoin transaction volume during the quarter—an impressive figure that nevertheless could not offset broader declines.
The contrast is stark: record market share and product milestones on one hand, but mounting losses and layoffs on the other.
Key Findings
- •Coinbase reported a Q1 2026 net loss of $394.1 million ($1.49/share), missing analyst expectations for a $0.27 profit.
- •An AWS outage in Northern Virginia on Thursday caused multi-hour crypto trading disruptions on Coinbase, impacting web and mobile users.
- •Coinbase shares fell over 5% after hours to under $184 following the earnings miss and service outage.
What the market is waiting for
The market is awaiting the official retrospective from AWS on the Northern Virginia outage, as Coinbase has stated its own investigation is pending further information from Amazon; if AWS confirms systemic risks or recurring vulnerabilities, immediate concerns may arise over the reliability of Coinbase's trading infrastructure.