by The cryptocurrency market is known for its volatility, and the latest news surrounding Coinbase (COIN) is a testament to that reality. Last week, shares of the Nasdaq-listed cryptocurrency exchange fell by an alarming 19.6%, closing at $314.69—marking its worst performance since September 2024, according to data from TradingView.
Coinbase’s Disappointing Earnings Report
On Thursday, Coinbase released its much-anticipated second-quarter earnings report. The results were disappointing for investors, revealing a net operating earnings per share of 12 cents, which represents an astounding 88.8% year-over-year decrease in the bottom line. The total revenue for the quarter amounted to $1.5 billion, falling short of analyst expectations set at $1.59 billion according to FactSet.
Additionally, Coinbase’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) dropped to $512 million, as transaction revenue declined by 39% compared to the previous quarter. This significant drop in performance aligns with insights from 10x, a crypto research firm that previously noted that the rally seen in the second quarter was overstretched relative to the underlying fundamentals. They advised investors to short COIN while accumulating Bitcoin (BTC).
Revised Recommendations from Analysts
In a further blow to Coinbase’s prospects, investment firm H.C. Wainwright downgraded the stock sharply from Buy to Sell early last month. This decision was primarily based on the conclusion that the rally in Coinbase shares had outpaced the market fundamentals, leading to a misalignment between price and performance. As the market continues to react, investors should remain cautious about their positions.
Increased Demand for Put Options
The recent sell-off has triggered increased demand for downside protection among traders. As of last Friday, the one-year put-call skew, which measures the demand differential between put and call options, surged to 2.6%—the highest since April 21. This indicates that put options, which serve as insurance against potential losses in the underlying asset, are trading at a 2.6% volatility premium compared to call options, reflecting a bearish sentiment among investors.
The Bigger Picture: Bitcoin and the Cryptocurrency Market
Despite the tumultuous week for Coinbase, the wider cryptocurrency market continues to show promise. Analysts remain optimistic about Bitcoin, with some experts predicting that it could still reach $140,000 this year. However, caution is warranted, as challenges may arise in 2026, according to insights from Elliott Wave experts.
This uncertainty underscores the importance of diversification in your cryptocurrency portfolio. For those looking to explore other options, consider investing in popular cryptocurrencies like Ethereum, Solana, or XRP. To learn more about these assets, check out our guides on How to Buy Ethereum and What is XRP.
Conclusion: Navigating the Volatile Crypto Landscape
As Coinbase grapples with its worst weekly performance since September 2024, investors must navigate an increasingly complex landscape. With such significant price fluctuations, staying informed is critical. Monitoring market trends, understanding the fundamentals behind each asset, and being aware of expert analyses can help investors make more informed decisions in this volatile environment.
For those considering entering the cryptocurrency space, resources such as our guides on How to Buy Bitcoin and How to Buy Cryptocurrency can provide essential insights to get started.
Meta Description: Coinbase shares plummeted nearly 20% last week, marking its worst performance since September 2024. Discover the reasons behind this drop, insights from analysts, and what this means for the cryptocurrency market in our detailed analysis.
