May 8 (Reuters) - 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.

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

selloff 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.

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.