Coinbase (NASDAQ: COIN) booked its third consecutive quarterly loss as the digital asset exchange’s customers looked elsewhere for entertainment and/or disappointment.
Coinbase reported revenue of $1.22 billion in the three months ending June 30, a 13.2% decline from the first quarter of this year and 18.5% below the same period last year. Coinbase booked a net loss of just under $360 million, a slight improvement over Q1’s $394 million loss but a world away from the $1.43 billion profit in Q125.
Q2 was a dire period for prominent tokens like BTC and ETH, and the price plunges appear to have convinced Coinbase users to stay on the sidelines rather than roll the dice in this crooked crypto casino. Monthly transacting users (MTUs), a broadly defined category that includes users whose activity amounts to nothing more than passively receiving staking rewards, totaled 7.6 million in Q2, down from 8.2 million in Q1 and from 8.7 million in Q225.
Transaction revenue totaled $599.2 million, down 21% from Q1. Consumer transaction revenue amounted to $451.7 million, one-fifth lower than Q1’s $567 million. Institutional transaction revenue fell 26.3% to $100 million. ‘Other’ transaction revenue added $47.4 million.
Transaction volume was similarly negative, with spot trading volume down 24% to $146.4 billion. Consumer volume fell 23.7% to $25.8 billion, while institutional volume slid 24% to $120.6 billion.
Notably, Coinbase’s Q2 report failed to include its usual breakdown of which tokens claimed what share of transaction volume/revenue. It’s unclear why this change was made, but it could be because the C-suite is embarrassed at how much of its trading volume relies on utility-free memecoins (more on this below).
Despite the negative numbers, Coinbase patted itself on the back by claiming an all-time high ‘crypto trading volume market share’ of 10.3%, up 1.2 points from Q1, thanks mainly to new derivatives products like perpetual futures.
Derivatives trading volume fared better than spot, falling a modest 2.3% to $1.06 trillion, while stablecoin volume was basically flat at $92.7 billion. Of the latter figure, stablecoin trading slid 23.4% to $7.5 billion, while stablecoin conversion (minting/burning) was up a modest 2.5% to $85.2 billion.
Coinbase isn’t the only platform noticing a thinning of its once-abundant retail customer herd. Earlier this week, Robinhood (NASDAQ: HOOD) reported Q2 crypto trading revenue of ~$100 million, down 38% year-on-year. Meanwhile, Robinhood’s new prediction market brought in $156 million over the same period.
The overall digital asset market is currently experiencing doldrums that some new arrivals have likely never encountered before. Glassnode analysts recently declared that BTC spot trading volume “has fallen to its lowest since 2019.”
That vaporized volume has persisted in the current quarter, as retail traders have belatedly realized that their primary role in this ecosystem is serving as exit liquidity for predatory whales. Like Mad Max, these crypto minnows now understand that any temporary pump in token prices isn’t the start of a new ‘to the moon’ phase, it’s bait.
USDC to the rescue
Coinbase’s ‘Subscription & Services’ segment reported revenue of $555.2 million in Q2, a nearly 5% decline from Q1. But with trading in the gutter, the segment’s share of Coinbase’s overall revenue hit 48%, up seven points from Q1.
The largest chunk of this segment, ‘stablecoin revenue,’ based largely on Coinbase’s lucrative partnership with USDC-issuer Circle (NASDAQ: CRCL), also fell ~5% to $292.1 million, while ‘blockchain rewards’ fell more than 42% to $83.3 million.
The stablecoin revenue decline came despite Coinbase celebrating a new all-time high in the amount of USDC held in various Coinbase products. Coinbase blamed the revenue decline on falling interest rates on the U.S. Treasury bills backing USDC, from which Coinbase gets a cut, along with a decline in USDC’s “off-platform balances.”
On the ensuing analyst call, CEO Brian Armstong and chief financial officer Alesia Haas were asked about Coinbase’s support for the new OpenUSD (OUSD) stablecoin, and what that means for Coinbase’s partnership with Circle, as the two companies’ current USDC deal expires in August.
Given USDC’s growing importance to Coinbase’s bottom line, Haas was eager to “take away any ambiguity” about the Coinbase-Circle partnership. Haas said Coinbase has “already met the conditions for the Circle contract to renew. So it will renew on the same terms … We will continue to work on growing USDC, partnering with Circle, and driving that ecosystem.”
As for why Coinbase is supporting a new USDC rival, Armstrong effectively shrugged, saying “we’re a multi-stablecoin platform. We want to provide the stablecoins that all of our customers want to use.” Noting that Coinbase already supports rival stablecoins like PayPal’s (NASDAQ: PYPL) PYUSD and Tether’s USDT, Armstrong said “we wanna make sure that we strike economic deals with every major stablecoin out there.”
Prediction market, Coinbase One subscribers up, but Q3 headed down
Coinbase’s nascent prediction market product reported “$100M+” in annualized revenue during the second quarter, although that’s what they said in their Q1 report. The prediction product’s revenue was said to be up 106% from Q1, thanks to the mid-June commencement of the FIFA World Cup, but the company didn’t offer any hard numbers. So just for fun, let’s say the prediction market made $1 in Q1 and $2.06 in Q2. (We’ll happily amend these figures if Coinbase offers more clarity.)
Coinbase celebrated an all-time high in the number of Coinbase One subscribers, passing one million members, driven by the increasing number of new products the platform has launched for which a subscription is required. But as one analyst wondered, given the zero-fee trades and other perks that subscribers enjoy, is this actually a good thing for Coinbase’s bottom line?
Haas said it was wrong to focus exclusively on trading activity, noting that subscribers also engage in other activities like staking and using their Coinbase One-branded credit cards, thereby “driving activity up and down the product stack” and eventually being “more net unit economic positive to us.”
Coinbase’s overall expenses totaled $1.33 billion in Q2, 7% lower than Q1, despite $52.4 million in ‘restructuring’ costs following Coinbase’s decision earlier this year to sack 14% of its workforce. But the dearth of trading on the platform helped reduce transaction expenses, so, you know, hurray.
Looking ahead to the current quarter, Coinbase says transaction revenue stood at $130 million through July 26, which would make for a very dire Q3 indeed if that trend persists over the next two months. Subscriptions & services are forecast to come in between $500-$585 million, effectively on par with its Q2 figures, which would allow the segment to easily claim the mantle of Coinbase’s new top performer.
Despite the discouraging trendlines, Coinbase execs continue to be rewarded for failing upward. The company doled out $238 million in stock-based compensation in Q2 and expects to issue a slightly larger sum ($245 million) in Q3.
Coinbase shares closed Thursday up 2.2% to $163.58, but they’re down nearly 28% since the year began and down over 56% in the past 12 months. And the shares tumbled sharply in after-hours trading, sliding as much as 7% as investors reacted to the broadly negative numbers.
Help wanted
Coinbase’s senior management ranks have undergone some shuffling, as chief legal officer Paul Grewal announced earlier this month that he was leaving the fold after six years. Grewal said he’ll be “transitioning to an advisory role at the end of the month and [will] continue my service on the Board of Coinbase National Trust Company.”
Reuters reported that Grewal’s role will be filled by former VP of legal Molly Abraham, who will take on the title of general counsel. Coinbase also elevated its global head of litigation, Ryan VanGrack, to the newly created role of vice-chair and head of corporate affairs. VanGrack says his new role will be more “broader corporate and public-facing” and will involve representing Coinbase before “key stakeholders and policymakers.”
The day after Grewal’s announcement, senior engineer Brock Miller announced he was exiting after eight years to take up a technical staff position at AI developer Anthropic.
On July 28, Rob Witoff was named Coinbase’s new chief technology officer. Witoff was an early Coinbase engineer who left in 2017 but returned in 2024 as Coinbase’s head of platform. Witoff has his work cut out for him, as the exchange has a bad reputation for going offline at inopportune moments.
Coinbase’s most recent unplanned downtime came on July 14, with the exchange left inaccessible for nearly an hour. The outage was blamed on “an unintended misconfiguration of an important network component as a result of a routine configuration update.”
In June, Coinbase’s Ethereum layer-2 network Base suffered two block production issues in as many days. The first of these lasted about two hours, while the second was resolved in about 30 minutes. While Coinbase insisted that no user funds were at risk, withdrawals were halted for a time.
This spring, Coinbase claimed “roughly 40%” of its code was being written either by or with the assistance of AI. This month, Coinbase claimed “roughly 100%” of “everything merged into our codebase” is AI-generated (but human-reviewed). God help us all.
This just in: shitcoins are shite
On July 15, Base lead Jesse Pollak announced that he’d “handed the base app back to the coinbase mothership.” Pollak said he’d tossed the reins of leadership to Jordan ‘Cobie’ Fish, founder of the crypto crowdfunding platform Echo, which Coinbase acquired last year for $375 million.
Pollak acknowledged the rough ride he’s had of late, calling 2026 “an exercise in eating shit.” Pollak’s belief that crypto adoption “would be driven by new onchain-native social experiences – creators, content, messaging” had proven to be “the wrong bet.”
Pollak, Base and Coinbase faced a torrent of criticism over their focus on ‘creator coins,’ aka content creators issuing memecoins that promised some vague utility via a ‘decentralized’ social app. But faith in this model “disintegrated completely” as the platform failed to catch on and the tokens shed what little value they had (as all memecoins eventually do).
Pollak was widely criticized at the time for his occasionally hyperbolic championing of certain tokens, including those affiliated with sketchy characters. Pollak claimed experience has taught him to “just put your head down and build. so that’s what i’m doing.”
But Pollak left the door open to “content coins,” including the one named after himself, saying he was “not going to just let $jesse fade away – when I launch something, I’m in it for the longer term.” So, to sum up: social network memecoins are a giant failure, but if someone else makes this work, please buy mine.
Coinbase CEO Armstrong echoed Pollak’s epiphany, saying ‘content coins’ “didn’t work and we pivoted early this year. We messed up, time to turn the page.” Yes, now that the bloom is officially off this rose, let’s forget the whole thing, particularly the part where Coinbase made bank from trading fees on the tokens they actively promoted while users got stuck with useless/worthless digital Beanie Babies. As one user acidly observed, “great job pivoting after there was not an atom of oxygen left in the room.”
Armstong also tried to distance himself from public perception that he was personally promoting certain memecoins, saying his social media activity was “simply posting things I find interesting or funny on the internet. I may not even be aware if there is a coin or project attached to the content I’m posting (you should assume I’m not, to be safe). My posts and profile pics are also not endorsements or commitments to anything.”
Armstrong was immediately challenged by a user who noted that a token named after the CEO was “doing $100M+ in volume” on Base. Armstrong claimed he had “nothing to do with that coin and honestly wasn’t really following it (might have seen a few mentions) … So I’m not going to jump in and support a coin I have nothing to do with.”
And yet, Coinbase continues to do everything in its power to make utility-free tokens available to its user base. On July 27, Coinbase announced that its decentralized exchange (DEX) had a new ‘Launches’ feature that allows users to “find and trade Base or Solana tokens as soon as they’re live onchain.” If anyone hasn’t yet labeled this feature ‘Failure to Launch(es),’ the blockchain sector’s sense of humor is just as MIA as its trading volume.
Watch | Unlocking Crypto Futures: Key Takeaways from Blockchain Futurist 2025
Be the first to comment