Crypto exchange Coinbase reported a drop in first-quarter profit on Thursday as a steep rise in costs more than offset revenue growth in its transaction and subscription units, sending its shares down 1.7% in premarket trading.

Total operating expenses soared 51% to $1.3 billion in the quarter, driven by increased marketing expenses as well as losses on crypto assets held for operations, the company said.

U.S. President Donald Trump's erratic trade policy had triggered volatility across asset classes during the first three months of the year, rattling financial markets and triggering a sell-off in assets perceived as risky, such as crypto.

However, its transaction revenue rose 17.3% to $1.26 billion. Revenue from the subscription and services unit, which houses businesses outside of trading, also jumped 37% to $698.1 million.

Total revenue rose to $2.03 billion from $1.64 billion a year earlier. That still missed analysts' expectations of $2.1 billion, according to data compiled by LSEG.

The company earned adjusted net income of $526.6 million, or $1.94 per share, for the three months ended March 31, compared with $679.2 million, or $2.53 per share, a year earlier.

The largest publicly traded cryptocurrency exchange said earlier in the day that it would buy derivatives exchange Deribit in a $2.9 billion deal to expand into the crypto options markets.