Coinbase and Strategy Face the Earnings Hangover 🍋

Coinbase (COIN) shares slipped roughly 5% in after-hours trading on Thursday after the crypto exchange reported second-quarter revenue of $1.22 billion, missing consensus estimates of $1.29 billion. Transaction revenue came in at $599 million against expectations of $628 million, while subscription and services revenue totaled $555 million versus forecasts of $599 million. The company posted an EPS of -$1.36, well below the -$0.42 analysts had expected. Coinbase added 819 BTC to its balance sheet during the quarter, bringing total holdings to 17,211 BTC, a 5% increase quarter-over-quarter. Bitcoin ($BTC) traded at $64,714.55 after falling about 14% in Q2, while ether ($ETH) lost roughly 25% over the same period, weighing on spot volumes across the industry.

Strategy (MSTR), the Bitcoin treasury firm, also missed expectations, reporting quarterly revenue of $122 million against estimates of $124.48 million and an EPS of -$24.45, far below the $3.07 consensus. MSTR shares were last seen trading around $97, down less than 1% in after-hours action. The combined results underscored the drag that a weaker Q2 for digital assets has placed on publicly traded crypto-linked companies, with industry spot trading volumes falling more than 20% and total crypto market capitalization declining by double digits, according to Coinbase CFO Alesia Haas, who noted those conditions contributed to a 14% quarter-over-quarter decline in Coinbase's total revenue.

Coinbase CEO Brian Armstrong pointed to growth beyond spot trading in an X post, highlighting stablecoins, Base and prediction markets, and noting that the exchange reached a record 10.3% share of global crypto trading volume during the quarter. Investors will be watching the earnings call for updated guidance, derivatives plans and further diversification efforts. Robinhood (HOOD) on Wednesday separately reported that its crypto trading revenue fell 38% year-over-year to $100 million from $160 million, reflecting the broader slowdown that has now shown up across trading platforms and treasury operators alike.