Morning Minute is a daily newsletter authored by Tyler Warner. The views and opinions expressed are solely his own and do not necessarily reflect those of Decrypt.
Good morning!
Here are the key highlights:
- Major cryptocurrencies are down while stocks show slight gains; BTC is down 2% at $63,700.
- Bitcoin ETFs recorded $233 million in net inflows, marking the second-largest inflow day since early May.
- Coinbase announced an unexpected loss in its Q2 earnings; the strategy recorded an $8.2 billion loss.
- The New York Attorney General has filed a petition to shut down Kalshi, seeking $36 billion in damages.
- A vulnerability in Coldcard has resulted in $38 million lost in Bitcoin.
š Coinbase Experiences Unexpected Loss Amidst Declining Trading
On Thursday, Coinbase reported revenues of $1.22 billion for Q2, reflecting a 14% decrease from the previous quarter and a 19% drop year-over-year, along with a net loss of $359 million. Following the announcement, COIN stock fell approximately 5% in after-hours trading.
The results fell short of expectations: revenue was below the anticipated $1.29 billion, and the loss of $1.36 per share was significantly worse than analysts had forecasted, which had projected a near break-even outcome. The overall crypto spot trading volume declined by over 20% compared to the previous quarter, as prices fell and volatility reached multi-year lows, resulting in a 21% reduction in transaction revenue to $599 million.
Even revenue from subscriptions and services, which are typically less reliant on trading, did not meet expectations. Coinbase attributed this shortfall to delayed USDC commercial agreements and lower staking income due to falling prices, which undermined the notion that its diversified business segments were insulated from trading cycles.
On a positive note, revenue from stablecoins hit $292 million, with average USDC holdings across Coinbase products reaching a record $20 billion, accounting for over 30% of all USDC in circulation. Additionally, revenue from prediction markets more than doubled quarter-over-quarter, increasing by 106% and surpassing a $100 million annualized run rate. Coinbase's share of global crypto trading volume reached an all-time high of 10.3%, marking the third consecutive quarter of market share growth, with 88% of net revenue now derived from sources other than Bitcoin spot trading, up from 45% in 2020. The company also reported $8.6 billion in cash, maintained a streak of positive adjusted EBITDA over 14 quarters, and lowered its expense outlook for the full year.
Comparing the results of Robinhood and Coinbase reveals interesting contrasts. Both companies reported a decline in crypto trading revenue alongside a rise in prediction market activity, but Robinhood achieved record profits while Coinbase faced a substantial loss. This indicates that Coinbase is more vulnerable to the trading cycle it is attempting to move beyond, and it lacks the diverse product lines that Robinhood has. Looking ahead to Q3, guidance appears relatively weak, although this may not account for Cobie's recent takeover of trading and apps. It will be intriguing to see how quickly he can implement changes to improve the situationā¦
š Macro Crypto and Markets
- Major cryptocurrencies are slightly down; BTC -2% at $63,700; ETH -2% at $1,880; SOL -1% at $73.40; HYPE +3% at $54.90
- Top altcoin movers include UNI (+5%), PUMP (+5%), and ADA (+3%)
- Oil +1% at $85; Gold +1% at $4,115
- Stock futures are positive as tech stocks and memory shares rise; DOW +0.5%, Nasdaq +1.2%
- Strategy reported an $8.2 billion loss in Q2 as Bitcoin prices fell below its $75,476 cost basis, significantly worse than the $2.15 billion anticipated by Wall Street, although it increased its holdings by 11% and stated that its cash reserves cover over two years of dividends.
- Cathie Woodās Ark Invest divested from BitMine while increasing its investments in Coinbase and Circle, reducing about $4.4 million across BitMine, Robinhood, Block, and Bullish following a decline in their shares, while acquiring approximately $43.5 million in Coinbase and Circle.
- Treasury Secretary Scott Bessent called for the Senate to pass the CLARITY Act, accusing Democrats of delaying for political reasons and concluding his appeal with a quote from Satoshi Nakamoto: āIf you donāt believe me or donāt get it, I donāt have time to try to convince you, sorry.ā
- The Bitcoin quantum threat has advanced as IBM announced a ātrusted quantum advantage,ā highlighting the need for enhanced security measures for Bitcoinās cryptography.
- Elon Muskās xAI filed a lawsuit against Minnesota to block the state's first AI nudification law, citing free speech concerns.
- Ondo Finance is considering an acquisition valued at up to $500 million, as the firm aims to expand through mergers and acquisitions in the real-world asset tokenization space.
Corporate Treasuries & ETFs
- Bitcoin ETFs experienced $233 million in net inflows on Thursday, while ETH ETFs saw $13 million in inflows.
Meme Coin Tracker
- Meme coins had mixed results; DOGE -1%, SHIB unchanged, PEPE -1%, PENGU +4%, TRUMP -2%, BONK -5%
- Robinhood chain was led by FRONG (+600x) and IF (+74%)
- Solana leaders included Moondogecoin (+300x) and KET (+60%); ANSEM +4% at $178 million
š° Token, Airdrop & Protocol Tracker
- The New York Attorney General filed a petition to shut down Kalshi in New York State, alleging it operates an illegal gambling scheme and is seeking at least $36 billion in damages.
- Pons launched on Uniswap's Launches aggregator, boasting over 210,000 tokens launched in two weeks and more than $283 million in volume through Uniswap pools, with a v2 expected on Uniswap v4 to connect memecoins and real-world assets on Robinhood Chain (PONS -12% to $28 million)
- A Coldcard vulnerability resulted in the loss of $38 million in Bitcoin, with 594 BTC stolen from approximately 500 wallets in just 25 minutes after a build error made seed phrases more easily guessable; the manufacturer Coinkite suspects an attacker utilized AI to exploit the flaw in its open-source firmware, a review that its own AI had previously overlooked weeks before.
š What is happening in NFTs?
- NFT leaders were down; Punks remained at 32.3 ETH, BAYC fell 1% to 8.3 ETH, Pudgy decreased 4% to 3.8 ETH; Hypurr remained steady at 189 HYPE.
- No significant movers were noted.