Morning Minute: Coinbase Posts Surprise Loss as Crypto Trading Dries Up

Morning Minute is a daily newsletter written by Tyler Warner. The analysis and opinions expressed are his own and do not necessarily reflect those of Decrypt.

GM!

Today’s top news:

• Crypto majors are red while stocks grind higher; BTC -2% at $63.7k
• BTC ETFs see $233M in net inflows, 2nd biggest day since early May
• Coinbase posts surprise loss in Q2 earnings; Strategy books $8.2B loss
• NY AG files petition to shut down Kalshi, seeks $36B in damages
• Coldcard exploit leads to $38M in Bitcoin losses

📉 Coinbase Posts a Surprise Loss as Trading Dries Up

Coinbase reported $1.22 billion in second-quarter revenue on Thursday, down 14% from the prior quarter and 19% from a year ago, along with a net loss of $359 million. COIN stock fell roughly 5% after hours.

The miss was broad: revenue came in below the $1.29 billion Wall Street expected, and the loss of $1.36 per share was far worse than the roughly break-even result analysts had modeled. Total crypto spot trading volume fell more than 20% from the prior quarter as prices slid and volatility hit multi-year lows, dragging transaction revenue down 21% to $599 million.

Subscription and services revenue also missed, despite being the less trading-dependent segment of the business. Coinbase blamed late-closing USDC commercial agreements and lower staking revenue from falling prices, but the shortfall undercut the idea that the diversified businesses are decoupled from the trading cycle.

On the bright side, stablecoin revenue reached $292 million, with average USDC held on Coinbase products hitting a record $20 billion, more than 30% of all USDC in circulation. Prediction-market revenue more than doubled quarter over quarter, up 106%, and crossed a $100 million annualized run rate. Coinbase’s share of global crypto trading volume hit a record 10.3%, its third straight quarter of market-share gains, and the company said 88% of net revenue now comes from sources other than Bitcoin spot trading, up from 45% in 2020. It also held $8.6 billion in cash, extended a 14-quarter streak of positive adjusted EBITDA, and lowered its full-year expense outlook.

Now that the results are in, it’s interesting to look at Robinhood and Coinbase side by side. Both reported crypto trading revenue shrinking and prediction markets surging, but Robinhood posted record profit while Coinbase posted an outright loss. Coinbase is clearly far more exposed to the trading cycle it’s trying to grow beyond, and it doesn’t yet boast 13 9-figure product lines. As for Q3, guidance is looking fairly soft. But that may not be accounting for Cobie taking over trading and the apps. Let’s see how fast he can get to work on turning the story around…

🌎 Macro Crypto and Markets

• Crypto majors are slightly red; BTC -2% at $63.7k; ETH -2% at $1,880; SOL -1% at $73.40; HYPE +3% at $54.90
• Top alt movers include UNI (+5%), PUMP (+5%) and ADA (+3%)
• Oil +1% at $85; Gold +1% at $4,115
• Stock futures are green as tech stocks and memory go higher; DOW +0.5%, Nasdaq +1.2%
• Strategy booked an $8.2 billion Q2 loss as Bitcoin fell below its $75,476 cost basis, far worse than the $2.15 billion Wall Street expected, though it added 11% to its stack and said its cash reserve covers two-plus years of dividends
• Cathie Wood’s Ark Invest sold BitMine while adding to Coinbase and Circle, trimming about $4.4 million across BitMine, Robinhood, Block, and Bullish after their shares fell, while recently buying roughly $43.5 million of Coinbase and Circle
• Treasury Secretary Scott Bessent urged the Senate to pass the CLARITY Act, accusing Democrats of stalling for political reasons and closing his appeal by quoting Satoshi Nakamoto: “If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry.”
• The Bitcoin quantum threat inched closer as IBM claimed a “trusted quantum advantage,” a milestone that renews urgency around hardening Bitcoin’s cryptography
• Elon Musk’s xAI sued Minnesota to block the US’s first AI nudification law, challenging it on free-speech grounds
• Ondo Finance is weighing an acquisition worth up to $500 million, as the real-world-asset tokenization firm looks to expand through M&A

Corporate Treasuries & ETFs

Meme Coin Tracker

• Meme leaders were mixed; DOGE -1%, SHIB even, PEPE -1%, PENGU +4%, TRUMP -2%, BONK -5%
• Robinhood chain was led by FRONG (+600x) and IF (+74%)
• Solana leaders included Moondogecoin (+300x) and KET (+60%); ANSEM +4% at $178M

💰 Token, Airdrop & Protocol Tracker

• The New York Attorney General filed a petition to shut down Kalshi in New York State over what it’s calling an illegal gambling operation and seeks at least $36B in damages
• Pons went live on Uniswap’s Launches aggregator, touting more than 210,000 tokens launched in two weeks and over $283 million in volume through Uniswap pools, with a v2 coming on Uniswap v4 to bridge memecoins and RWAs on Robinhood Chain (PONS -12% to $28M)
• A Coldcard key flaw drained $38 million in Bitcoin, with 594 BTC swept from about 500 wallets in 25 minutes after a build error left seeds far more guessable than intended; maker Coinkite believes an attacker used AI to find the bug in its open-source firmware, a review its own AI had missed weeks earlier

🚚 What is happening in NFTs?

• NFT leaders were red; Punks even at 32.3 ETH, BAYC -1% at 8.3 ETH, Pudgy -4% at 3.8 ETH; Hypurr’s even at 189 HYPE
• No notable movers