Coinbase Q2 results exceed expectations

The largest cryptocurrency exchange in the United States announced impressive second quarter results last night.

According to the company, revenue of $2.23 billion was significantly higher than the $1.78bn analysts had expected.

Adjusted earnings stood at $3.45 per share, which excludes stock-based compensation benefits. This figure was much higher than the anticipated $2.33.

The company’s net profit for the quarter stood at $1.6 billion, representing a 4,900% rise from a year earlier, following a volatile stretch of trading for cryptocurrencies.

Bitcoin volatility problem

However, the company admitted it had suffered from the consequences of Bitcoin’s volatility – particularly its 41% fall during the three months of Coinbase’s second quarter results.

“Q2 illustrated the volatility we have anticipated in these still-early days in the crypto economy,” the report said.

“As volatility and crypto asset prices are highly correlated with trading revenue, the crypto market environment heavily influenced our Q2 financial results.”

Still, Coinbase managed to claim $2.0 billion in net revenue, including $1.9 billion in transaction revenue and more than $100 million in subscription and services revenue.

Monthly transacting users rose to 8.8 million – up 44% from the previous quarter – while trading volume jumped by 38% to $462 billion from the previous quarter.

The company said its trading volume diversified beyond Bitcoin into Ethereum and other altcoins. Around 24% of the company’s total trading volume for the quarter was concentrated in Bitcoin, representing a 39% fall in the first quarter.

According to the report, expectations were not so positive. Refinitiv experts say they expect trading volume to be lower in the third quarter compared to Q2. For the full year, the price per share will stand at $7.76 on revenue of $6.29 billion, Refinitiv predicts.

Mizuho’s analyst Dan Dolev maintained a neutral rating on the stock, describing its results from here as a “coin toss”.

“With August average daily volumes running 80% above July, the excitement around the stock in the past week is somewhat understandable,” he said.

“However, since volatility can fade just as quickly as it comes, Coinbase’s fiscal-year outlook remains somewhat of a coin toss.”