Coinbase reported Q2 2024 financial results. It made $1.45 billion in revenue and a net income of $36 million reflecting Bitcoin dominates crypto trading volume while altcoins stumble

Coinbase reported generating $1.45 billion in revenue during the second quarter of 2024, surpassing the analysts' estimates of $1.40 billion.

This marked a significant 104.8% year-over-year increase in revenue compared to the same quarter in 2023.

In the second quarter of 2024, Coinbase reported a net income of $36 million, a significant drop from nearly $1.2 billion in the first quarter of the same year.

During the first quarter, Coinbase's net income was bolstered by a $1.18 billion.

Net income, also known as net profit or net earnings, is the total amount of profit a company has after all expenses have been deducted from its total revenue.

Summary of Coinbase’s financial statement since 2021

Coinbase's revenue since 2021:

Coinbase’s net profit since 2021:

The decrease in Coinbase’s net income for Q2 2024 can be attributed to several factors:

Trading Volume Decline

There was a 27% decrease in transaction fees, which is Coinbase’s biggest source of income, due to a 28% fall in trading volume. This decline in trading activity directly impacts the company’s revenue and profitability.

Investment Portfolio Losses

Coinbase reported $319 million in pre-tax cryptocurrency losses in its investment portfolio. These were mostly paper losses as market prices were lower at the end of Q2 compared to Q12.

Interest Income Reduction: Interest income from USDC, a stablecoin, was down 25% sequentially3. This reduction in interest income would have also contributed to the lower net income.

Despite these challenges, it’s worth noting that Coinbase’s subscription and services revenue grew by 17% from the previous quarter, indicating some positive aspects in their financial performance.

The company’s efforts to diversify its revenue streams, such as becoming a part of the spot bitcoin and ether exchange-traded funds (ETFs) business can help mitigate the impact of decreased trading volumes.

Some facts to consider about Coinbase stock

1. Coinbase is the 5th largest cryptocurrency exchange by trading volume. It has the potential the capture market share into the future.

2. Base is the 6th largest blockchain by TVL.

3. Coinbase has support from the U.S. government.