Coinbase (COIN) stock plunged 14%, its biggest intraday drop since April after the crypto platform high flyer's revenue last quarter took a hit from lower trading volume.
Revenue for the company's second quarter increased 3.3% year over year to $1.5 billion. Wall Street was expecting a climb to $1.59 billion. Revenue also slowed from $2 billion in the prior quarter.
Total trading volume declined 40% in the second quarter as crypto asset volatility declined.
“Despite the average crypto price market cap being roughly flat, we saw shifting macro conditions, including trade policy considerations and recession concerns, impact risk assets broadly. And crypto assets were no exception,” Alesia Haas, chief financial officer of Coinbase, said on the company's post earnings conference call.
“We saw a divergence between bitcoin and everything else as the average bitcoin price in the quarter was up 6%, whereas non-bitcoin asset market cap declined 11%,” Haas added.
Coinbase shares hit record highs last month as Bitcoin (BTC-USD) reached new all-time highs and Circle (CRCL), a stablecoin issuer, rallied on optimism surrounding new regulations for US dollar backed digital tokens.
Bernstein analysts recently dubbed Coinbase a “one-stop Amazon” of crypto services. On Thursday night, Gautam Chhugani reaffirmed an Outperform rating on the stock with a $510 price target and said in a note that the “quarter that doesn't matter.”
Instead, the analyst said investors should focus on crypto derivatives and the company's “everything exchange” vision for the platform.
On Thursday night, CEO Brian Armstrong highlighted on the company earnings call Coinbase's focus on tokenized equities, or digital tokens representing real-world stocks.
‘We believe tokenized equities are more efficient with global coverage, 24/7 trading, instant settlement, and the ability to offer perpetual futures,” Armstrong told analysts.
Year-to-date Coinbase shares are up roughly 24%.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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