Coinbase shares rise 3% as Q2 crypto trading doubles from last year

Coinbase shares rose 3.2% after hours following its latest Q2 results filing — reporting $1.4 billion in revenue in Q2 along with a hefty year-on-year increase in crypto trading volumes.

The crypto exchange reported $266 million in consumer and institutional trading volumes, up from the prior year period and in line with analyst estimates, though it was a considerable drop from the $312 billion reported in Q1.

When it came to revenue, Coinbase gained the most ground from subscription and services revenue, which includes stablecoin revenue, blockchain rewards and fees. This marked a 17% increase from Q1 and nearly doubling from Q2 2023.

Coinbase partially attributed this rise to it serving as a custodian for several asset managers issuing spot Bitcoin (BTC) exchange-traded funds.

The exchange’s transaction revenue, which results from crypto trading activity, doubled from Q2, 2023 to hit $780.9 million, though it was down from the first quarter.

Of this, $664.8 million came from consumer-based transaction revenue — falling short of a $695 million estimate from investment research firm Zacks. But institutional transaction revenues came out at $63.6 million — beating a $55 million estimate from Zacks.

It marked the third straight quarter that Coinbase returned a profit and the sixth on an adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) basis. Net income was $36 million in the quarter.

Coinbase said this included $319 million in pre-tax cryptocurrency losses in its investment portfolio — mostly paper losses — as market prices were lower at the end of Q2 than in Q1.

But Coinbase’s biggest win in Q2 may have come from the regulatory progress made in Washington DC — not its balance sheet:

“In Q2, we made extraordinary progress toward driving regulatory clarity in the US and around the world. Crypto legislation has become a mainstream issue in the US, garnering bipartisan support, and there is real energy within both the House and the Senate to pass meaningful legislation.”

Coinbase’s (COIN) share price fell 5.2% to $212.6 on Aug. 1 before reporting but rebounded 3% after the firm posted its financial results after-hours, Google Finance data shows.