Coinbase's Q2 Results: Diversification Softens but Doesn't Stop Revenue Decline

Coinbase told investors on Thursday that 88% of its second-quarter net revenue came from something other than Bitcoin spot trading. The same release reported a $359.5 million net loss under US accounting rules, the company's third consecutive losing quarter. Both numbers describe the same three months. Taken together, they get closer to the truth about Coinbase than either one does alone. [...] The company has finished the first half of its escape. Bitcoin spot fees no longer decide the quarter, and the company owns real positions in derivatives, stablecoins, custody, lending, prediction markets, and onchain infrastructure. The second half is still in progress, because every one of those businesses earns more when balances grow, prices recover, volatility returns and customers transact more often. Those are the conditions the old trading business ran on. Coinbase reported roughly $130 million of transaction revenue through July 26 and guided subscription and services revenue to between $500 million and $580 million, a midpoint a little below where June ended. The company has built several ways to earn from the crypto cycle where it once had one, and the next few quarters will settle whether several cyclical businesses can add up to a durable one.