--- title: "COIN: Crypto Slide Retests Lows; Will Policy Tailwinds Return?" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/43113277.md" description: "$Coinbase(COIN.US) reported Q2 results, further deepening the Q1 slump.Specifically:1) Trading remained weak: trading revenue fell 19% YoY. The company did not disclose headline trading volume this quarter, but Coinbase spot volumes dropped sharply YoY and QoQ.The industry showed the same trend. Per CoinGecko, Q2 industrywide spot crypto volumes fell 27% QoQ, and total market cap declined 11% QoQ. In the filing..." datetime: "2026-07-31T08:40:17.000Z" locales: - [en](https://longbridge.com/en/topics/43113277.md) - [zh-CN](https://longbridge.com/zh-CN/topics/43113277.md) - [zh-HK](https://longbridge.com/zh-HK/topics/43113277.md) author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- # COIN: Crypto Slide Retests Lows; Will Policy Tailwinds Return? $Coinbase(COIN.US) Q2 results extend the deterioration seen in Q1. Here are the details: **1\. Trading slump worsened:** trading revenue fell 19% YoY. The company did not disclose headline trading volume this quarter, but Coinbase spot volumes declined sharply both YoY and QoQ. The industry saw the same pattern. Coingecko data show spot crypto volumes fell 27% QoQ in Q2, while total market cap shrank 11% QoQ. In its filing, Coinbase reported its share of spot volumes on centralized exchanges rose steadily to 10%. **2\. Subscriptions also weak; soft guide:** non-trading subscription revenue, driven by stablecoin income, staking, Base chain fees and net interest, was $560 mn in Q2, down 12% YoY and 5% QoQ. This line is somewhat smoother than trading. By component, stablecoin income largely follows market cap swings, while staking was hit by both token prices and yields and fell sharply. **Only custody fees and Base chain income were relatively stable, up 4% QoQ and down 5% YoY.** For Q3, the company guided subscription revenue to be flat QoQ but below expectations. That implies a slower near-term recovery in USDC expansion and a sluggish rebound in ETH/SOL prices and staking yields. **3\. Larger stablecoin holdings:** the stablecoin market contracted in Q2, pressured by weak crypto sentiment and the CLARITY Act being put on hold. USDC market cap fell to $73.5 bn, down 5% QoQ, with larger swings than USDT. The main reason may be USDT’s broader use cases, such as merchant payments, and a higher share of non-US users. As a result, it is less sensitive to rate moves and the timing of the CLARITY Act. Coinbase continued to add USDC. Average platform-held and custodied USDC reached $20 bn in Q2, 26% of circulation, up from 25% in Q1. Its partnership with Circle has been renewed, keeping both sides tightly aligned. **4\. Core profit turned negative:** revenue pressure and relatively sticky costs squeezed margins, even though Q2 opex was trimmed through layoffs. Severance, Deribit consolidation and new product investment pushed R&D up 22%. Core profit (GP minus opex) turned negative this quarter. **5\. Buybacks slowed:** Q2 buybacks were only $120 mn (810k shares at an avg. $149), largely during the sharp pullback in Jun. In Q1, buybacks totaled $1.1 bn. Of the $4 bn authorization, half has been used, leaving $2 bn for future repurchases. No explicit timetable was given. **6\. Key metrics at a glance** **Dolphin Research view** Q2 was an intensified version of Q1’s collapse. There was almost no major crypto rally in Q2, with persistent geopolitical frictions and sticky rate expectations on one hand, and capital interest siphoned into AI globally on the other. Volumes have contracted back to 2023 levels. We therefore see Q2 fundamentals as worse. But with COIN’s market cap already down materially after the last earnings, the market reaction to a tougher Q2 print was less severe than in Q1. At this point, crypto remains vulnerable to risk-off moves from rate expectations and geopolitics. Whether the CLARITY Act advances has become a more important catalyst. If the late-Jul window is missed, it may slip beyond this year. Coinbase’s CEO says he is confident and noted multiple stakeholders have been pressing the Gov. recently. With the Aug. recess approaching, that could push the Senate to move the CLARITY Act to a floor vote. **With crypto prices under pressure and trading shrinking, COIN’s profit outlook is being cut.** Although the market cap has fallen to $45 bn, about 20% below post-Q1 levels, valuation still has not reached our conservative floor range. Given the limited policy window and remaining uncertainties, we recommend staying on the sidelines and waiting for clearer commitments on the Act. **Detailed analysis below** **I. Coinbase core biz.** Coinbase has evolved from an exchange into an on-chain integrated finance platform centered on digital assets. Versus peers, its key edge is regulatory friendliness, which could be advantageous if regulators actively endorse and promote the asset class. By revenue buckets, Coinbase has three main sources: **trading, subscriptions, and other.** Trading is highly sensitive to market activity but still accounts for over 50% of revenue. Subscriptions and other (custody/settlement, staking, stablecoin, data/cloud, and investment gains) act as a stabilizer, as their growth is steadier and can partially offset trading volatility. A clear trend is emerging: as use cases broaden, competition intensifies, and the mix of incremental capital shifts, Coinbase’s reliance on trading should decline over time. The strategy is to attract users with lower fees, then expand ARPU through integrated financial services. Today, Coinbase mainly leverages its compliance edge to offer discounted rates to institutions. As stablecoins penetrate cross-border B2B and RWA-on-chain use cases, Coinbase could become the pick-and-shovel provider in a rising digital asset tide. ![图示描述已自动生成](https://pub.pbkrs.com/uploads/2026/d3deaaeb2aa1e50f3012707f5a6b8b99?x-oss-process=style/lg) ![图示描述已自动生成](https://pub.pbkrs.com/uploads/2026/775393e4c7d0b339d1c7696e68da5fbb?x-oss-process=style/lg) **II. Bottoming market drove an extreme trading contraction** First, a look at Coinbase’s user ecosystem. With higher macro uncertainty in Q2, transacting users fell by another 0.6 mn QoQ to 87.6 mn. A rough cut suggests per-user trading volumes fell about 30% QoQ, pushing sentiment to a new trough. **Platform assets kept shrinking**, with end-of-quarter customer assets plus segregated custody at $25 bn (incl. fiat), down 16% QoQ. This mainly reflects AUM declines from market moves, though there was some dip-buying. **III. Trading: spot fell hard; derivatives and prediction markets partly offset** Near term, Coinbase still depends heavily on trading (53% of revenue). Q2 trading revenue fell 22% YoY, with the QoQ trend cushioned by a lower base. Volumes declined 24%, but derivatives income and the acquired Deribit added full incremental contribution, providing some hedge. Industry-wide, crypto market cap ended a bit above $2 tn, and centralized spot ADTV fell nearly 20% YoY per Coingecko. Coinbase said its spot market share ticked up, likely helped by new listings that boost engagement and stickiness. Ultimately, trading revenue is driven by notional and volatility. Q2 trading revenue was $600 mn, down 22% YoY and 21% QoQ. **III. Subscriptions: stablecoins and staking cooled; only Base kept expanding** Q2 subscription revenue was $555 mn, down 5% QoQ. Midpoint Q3 guidance is $540 mn, implying another sequential decline. Breakdown: (1) Stablecoin income fell 4% QoQ. While the platform’s share of USDC holdings rose to 26%, USDC circulation shrank due to several factors. Institutional participation is higher in USDC, so risk-off flows amid macro volatility led to larger redemptions vs. USDT, which has more merchant payment use. At the same time, a cooling of DeFi leverage also drove near-term USDC selling. Coinbase reduced the pass-through incentive on USDC balances in Q2 (from 61% to 51%). This may reflect pushback from banks over incentives that resemble dividends and a desire to protect spread as rates decline YoY. (2) Staking rewards fell 17% QoQ as ETH, SOL and others slid further. Staking now accounts for under 15% of subscriptions. Management guided Q2 subscription revenue at $500–580 mn, with the midpoint implying sequential decline. This suggests external pressures will not ease quickly. (3) The remaining subscription items, mainly institutional custody and Base chain income, rose 4% QoQ. This segment is roughly stable. **IV. Profitability deteriorated further** With revenue collapsing and costs sticky, earnings pressure intensified. In addition, Deribit consolidation and investments in stock token trading, 24x7 perps, and event prediction products pushed Q2 core OP to a small loss. Severance for 600+ employees was about $50 mn and is included in opex. Even adding that back, core OP would only be roughly breakeven. To smooth depreciation/amortization cycles, the market may focus more on Adj. EBITDA. Q2 Adj. EBITDA was $208 mn with a 17% margin, down 400 bps QoQ. **Dolphin Research 'Coinbase' archive:** May 8, 2026 call notes '[Coinbase (Trans): Confident to pass the Act by late summer](https://longbridge.cn/topics/40547221?channel=SH000001&invite-code=355628&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=1f232713-1116-437f-a163-05ddac452909)' May 8, 2026 earnings take '[Coinbase: Parched for too long, waiting for a policy downpour](https://longbridge.cn/topics/40546837?channel=SH000001&invite-code=355628&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=1a7bd51c-5d74-4ff6-b91c-14e375386f61)' Feb 13, 2026 call notes '[Coinbase (Trans): Last year was for investment; this year will be disciplined](https://longbridge.cn/topics/38719968?channel=SH000001&invite-code=355628&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=2316384b-0bd2-4331-8f7b-382dba7b8fa7)' Feb 13, 2026 earnings take '[Bad market + bad print: when is Coinbase’s bottom?](https://longbridge.cn/topics/38718107?channel=SH000001&invite-code=355628&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=eefc1e90-50a2-47be-8421-89383301d42b)' **Risk disclosure and disclaimer:** [**Dolphin Research Disclaimer and General Disclosure**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [COIN.US](https://longbridge.com/en/quote/COIN.US.md) - [CRCL.US](https://longbridge.com/en/quote/CRCL.US.md) - [BASE.US](https://longbridge.com/en/quote/BASE.US.md) ## Comments (1) - **不赌博的交易员Mitch · 2026-07-31T10:41:57.000Z · 👍 1**: The focus isn't here; you're paying too much attention to the details. The key question is whether the 'everything trading' strategy is still progressing? Has there been any change in its contribution to revenue? Is the loss due to a breakdown in logic or excessive investment? These are the fundamen