Coinbase says 88% of its second-quarter net revenue came from outside Bitcoin spot trading, yet the exchange still posted a $359.5 million net loss, its third straight quarterly loss. Trading fees still out-earned the entire subscription business, and shares fell about 6% in after-hours trading.
Coinbase told investors on Thursday that 88% of its second-quarter net revenue came from something other than Bitcoin spot trading. The same release disclosed a $359.5 million net loss under US accounting rules, the company's third consecutive losing quarter. Both figures describe the same three months.
Trading still drives the bottom line
Bitcoin spot fees now make up roughly an eighth of Coinbase's net revenue, against 55% in the second quarter of 2020, while subscription and services revenue grew from $6 million to $555 million over the same stretch. Yet transaction revenue of $599 million still exceeded the entire subscription business. Consumer trading alone brought in $452 million, more than a third of everything Coinbase earned.
The wider market made the quarter harder than usual. Industry-wide spot volume fell 25% quarter over quarter, crypto prices dropped 11%, and volatility compressed to multi-year lows. Bitcoin lost roughly 14% across April, May and June, while Ethereum fell about 25%.
Still, total revenue declined 14% to $1.22 billion, and the company took a record 10.3% share of global crypto trading volume, up from 9.1% in the first quarter. Yet shares fell about 6% in after-hours trading from a $163.55 close.
New business lines carry the same exposure
Coinbase's push into derivatives supplies the clearest evidence of structural change. Volume held roughly flat while the broader market fell about 12%, pushing Coinbase to a record share for the third straight quarter. Trailing-twelve-month volume stood above $4.2 trillion. That growth was built in part on the $2.9 billion Deribit acquisition.
The exchange's stablecoin business shows the opposite pattern. Average USDC held in Coinbase products reached an all-time high of $20 billion, up 44% year over year and equal to more than 30% of the token's circulating supply. But stablecoin revenue still fell to $292 million from $305 million in the first quarter, as lower interest rates outweighed the record balances.
Cost cuts closed part of the gap
Coinbase cut 14% of its workforce in May, ending June with 4,321 employees against 4,988 three months earlier, and took a $52.4 million restructuring charge that helped bring adjusted expenses down 9% to about $1 billion. Inside the headline loss sit $209.5 million of losses on crypto held for investment and $238.3 million of stock-based compensation. That is why CFO Alesia Haas pointed to a $105 million adjusted net loss as the better measure of the quarter.
The exchange has traded one dependency on Bitcoin's price for several — each still needs balances to grow, prices to recover or customers to keep transacting, the same conditions the old trading business ran on.
Source: CryptoSlate
Trading involves risk.
Risk Disclaimer
