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Coinbase shares rose by 3.2% after the financial report results were announced, reporting $1.4 billion in revenue and a significant year-over-year increase in crypto trading volume for the second quarter. The crypto exchange reported $266 billion in consumer and institutional trading volume, up from the previous year and in line with analyst estimates, but noted a significant decline from the $312 billion reported in the first quarter.
Coinbase’s Financial Report Released
In terms of revenue, Coinbase benefited the most from subscription and service revenues, including stablecoin revenue, blockchain rewards, and transaction fees. This was a 17% increase from the first quarter and nearly doubled compared to the second quarter of 2023.
Coinbase attributed this increase partly to serving as a custodian for several asset managers issuing spot Bitcoin exchange-traded funds. The exchange’s transaction revenue from crypto trading activities doubled to $780.9 million compared to the second quarter of 2023, but showed a decline from the first quarter.
Of this, $664.8 million came from consumer-based transaction revenues, falling short of investment research firm Zacks‘ estimate of $695 million. However, institutional transaction revenues amounted to $63.6 million. This marked Coinbase’s third consecutive quarter of profitability and the sixth quarter on an adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) basis. Net income for the quarter was recorded at $36 million.
Details on the Subject
Coinbase stated that this period included a pre-tax crypto loss of $319 million in its investment portfolio. However, Coinbase’s biggest gain in the second quarter may have come from regulatory progress recorded in Washington DC, rather than its balance sheet:
“In the second quarter, we made outstanding progress towards achieving regulatory clarity in the US and worldwide. Crypto legislation has become a mainstream topic in the US, garnering bipartisan support, with real energy to pass meaningful legislation in both the House of Representatives and the Senate.”
Coinbase’s (COIN) stock price fell by 5.2% to $212.6 before the report on August 1, but according to Google Finance data, the company recovered by 3% after releasing its financial results after hours.
