Coinbase Stock Tumbles, Despite Exchange’s Huge Crypto Announcements

Coinbase has released its earnings report for the second quarter — and it’s fair to say analysts are disappointed.

Estimates had suggested that the major crypto exchange was poised to post revenues of $1.59 billion in the second quarter, but this came in at $1.5 billion.

And just take a look at net income over this period — $33.2 million. That’s a huge drop compared with the $294.4 million seen in Q2 2024.

Chief financial officer Alesia Haas sought to head off these concerns on an earnings call with investors — saying:

“We have long said that crypto is not linear on a quarter-to-quarter basis. And Q2 was no exception. Amid lower volatility and non-Bitcoin price headwinds, we were focused on execution.”

The period from April to June did see Bitcoin recover from the lows of $75,000 recorded in the aftermath of “Liberation Day,” with the world’s biggest digital asset returning to six-figure territory by early May.

However, this wasn’t matched by a buying frenzy among retail users — many of whom decided to HODL in the hopes valuations would rise. As Haas explained:

“Our consumer spot trading volume was $43 billion, down 45%. And consumer trading revenue was $650 million, down 41%.”

This snapshot in time fails to take into account BTC’s subsequent surge to fresh all-time highs of $123,000 in July — meaning box office levels of trading activity might not start emerging in Coinbase’s numbers until Q3 results in the fall. And in any case, executives wanted to make one thing perfectly clear: they’re still laser-focused on building new products for when the masses come.

Chief executive Brian Armstrong said his top priority is driving growth in the exchange’s core business — crypto trading and stablecoin payments. Setting out Coinbase’s ambitions, he added:

“Our goal is to be the #1 financial services platform in the world across custody, trading, payments, staking, borrowing and lending and more … People want to invest capital across all asset types, from stocks to commodities, to real estate, to crypto including meme coins and the long tail of assets.”

Armstrong went on to reveal that Coinbase wants to become an “everything exchange” — and in a significant development, reiterated his desire for the trading platform to eventually list millions of tokens. Intensive listing processes and strict regulation have made that difficult until now, but the exchange’s push to integrate decentralized alternatives could eliminate these hurdles once and for all.

“In Q2, we hit over 300 total assets listed on our exchange. Next week, we’ll be rolling out the next chapter of our asset addition strategy by integrating decentralized exchanges right into the Coinbase app, which will eventually enable access to millions of tokens.”

Coinbase also appears to be gearing up to compete with other projects in the crypto space — namely the likes of Polymarket — by pushing into prediction markets “in a compliant and trusted way … while making it easily accessible to everyone.”

Although betting on what Bitcoin’s price will be worth at the end of this month might not be appealing to most consumers, there’s one thing that could pique the interest of non-crypto native audiences: slicker transactions. Armstrong added:

“We see payments as the next big use case in crypto and believe that the majority of all payments in the economy will eventually run on stablecoin rails because they are faster, cheaper, and global.”

Another significant announcement pre-empted the earnings report, with Coinbase announcing it would deliver a “direct bank-to-wallet connection” for JPMorgan Chase customers — making it easier to facilitate purchases. A statement added:

“Chase customers will be able to transfer their Chase Ultimate Rewards points to their Coinbase Account. This marks the first time a major credit card rewards program will be used to fund a crypto wallet.”

This could prove to be seismic for adoption — and it’s particularly interesting to see JPMorgan leading the charge here given how its CEO Jamie Dimon is renowned for being an avid Bitcoin skeptic.

Coinbase’s share price took a pretty hefty battering in after-hours trading as investors digested the results — dropping by about 9.2%. But zooming out a little, it’s important to stress that COIN stock has jumped close to 50% so far this year.

Given BTC’s rallied by 12% over the past month — with ETH surging 47% — Q3’s numbers are more likely to give investors something to cheer about.

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