COINBASE SHARES DROP AFTER POSTING WIDER-THAN-EXPECTED LOSS

Coinbase shares fell more than 7% in extended trading on Thursday following the release of second-quarter financial results that fell short of analyst expectations. The crypto exchange reported a loss of $359.5 million, or $1.36 per share, for the quarter ended 30 June, compared with a profit of $1.43 billion, or $5.14 per share, a year earlier. Revenue declined to $1.2 billion from $1.5 billion in the same period last year. Wall Street analysts surveyed by LSEG had expected a loss of 17 cents per share and revenue of $1.3 billion.

The results marked Coinbase's third consecutive quarter missing analyst forecasts for both revenue and earnings. The company attributed the decline partly to weakness in the broader crypto sector, alongside a challenging macroeconomic environment characterised by elevated interest rates and market volatility. Bitcoin prices remained largely range-bound during the quarter, and flows into bitcoin exchange-traded funds shifted to sustained outflows. Subscription revenue rose to $555 million compared with transaction revenue of $599 million, though both categories missed expectations and fell short of prior-year figures.

Coinbase has sought to diversify its business beyond core crypto trading operations to reduce dependence on volatile market conditions. The company's reported earnings figures are subject to significant fluctuation due to accounting rules requiring it to revalue its cryptocurrency holdings at quarter-end prices, even when no assets are sold. The financial performance underscores the pressures facing the crypto sector during an extended period of reduced investor appetite for digital assets.