Coinbase eyes ‘Everything Exchange’ despite Q2 revenue decline

This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.

---

Coinbase had a down second quarter from a revenue perspective, but remains undeterred in ultimately trying to bring every asset class onchain. 

First, some numbers.

The company’s total revenue of $1.5 billion in Q2 was 26% lower than the prior quarter. Transaction revenue took the biggest hit, dropping 39% quarter over quarter to $764 million amid lower volatility. Subscription and services revenue fell 6% to $656 million.

Worth noting: Competitor Robinhood also saw April-June transaction revenue plummet — dropping 36% to $160 million.

COIN shares were trading around $318 in the early afternoon — down 16% on the day. HOOD’s stock price was pretty flat halfway through the session.

We noted nuanced outlooks from analysts heading into Thursday’s Coinbase report. And indeed — despite the overall revenue decline — the company claimed some victories. 

Its stablecoin revenue, for example, grew 12% from the prior quarter to $332 million as average USDC balances held in Coinbase products reached $13.8 billion.

Coinbase expects stablecoin revenue momentum to continue given USDC’s new all-time high market cap in July. The company is thus projecting higher Q3 subscription and services revenue ($665–$745 million). 

Executives also said they expect July transaction revenue to be $360 million — already nearly half of Q2’s total.

Beyond the numbers, CEO Brian Armstrong on Thursday labeled the number one thing Coinbase’s customers want from the exchange: enabling many more assets to trade in a “one-stop shop” on crypto rails. Coinbase is calling it the Everything Exchange.

Integrating decentralized exchanges into its app will help on the crypto-tokens front. And now Coinbase is working toward bringing tokenized equities “to meet the moment in this new regulatory environment.”

To that last point, Armstrong’s comments came just hours after SEC Chair Paul Atkins made a speech of his own. 

And Atkins’ comments followed the White House’s release of its “Strengthening American Leadership in Digital Financial Technology” report.

The report acknowledges tokenization benefits like “the programmability and peer-to-peer transferability of assets, operational efficiencies…and increased transparency relative to traditional finance markets.” 

All things much of the industry has already heard, sure — but now the government is saying it formally. 

At the same time as Coinbase’s update, Strategy reported its Q2 results. That included $10 billion of net income and ample forward-looking commentary.

Executives outlined a multi-year plan to retire its outstanding convertible debt and replace it with a preferred stock-focused funding model as it continues to accumulate bitcoin. Strategy’s holdings stand at 628,791 BTC. 

Strategy’s corporate treasury (~$74 billion worth of BTC) is the fifth-largest in the world, Benchmark analyst Mark Palmer pointed out in a Friday note. Strategy CEO Phong Le envisioned a scenario in 3-5 years where the company’s capital base surpasses that of Berkshire Hathaway ($348 billion).

Palmer raised his MSTR price target to $705, which assumes BTC will hit $225,000 by the end of 2026. MSTR shares were going for $376 at the time of writing — down 6% on the day.

There’s a taste of where these chief crypto stocks stand. No financial advice here.

---

Get the news in your inbox. Explore Blockworks newsletters:

• The Breakdown: Decoding crypto and the markets. Daily.
• 0xResearch: Alpha in your inbox. Think like an analyst.
• Empire: Crypto news and analysis to start your day.
• Forward Guidance: The intersection of crypto, macro and policy.
• The Drop: Apps, games, memes and more.
• Lightspeed: All things Solana.
• Supply Shock: Bitcoin, bitcoin, bitcoin.