Coinbase Shares See Boost as Crypto Trading Volume Declines

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Coinbase (COIN), the world’s largest cryptocurrency exchange, reported its quarterly results late Thursday. The stock price has soared 160% this year due to positive news on ETFs and legal successes.

The net loss for the quarter was 42 cents per share, which was better than the expected 76 cents per share. Revenue dropped 17.9% to $663 million, lower than Wall Street’s forecast of $628 million.

Monthly Transacting Users (MTUs) declined by 19% to $7.3 million, and consumer trading volume decreased 70% to $14 billion. Institutional trading volume also dropped 54% to $78 billion.

Canaccord analyst Joseph Vafi noted that Coinbase has gained “material momentum” across different fronts and will likely continue to see momentum in the second quarter.

Crypto prices and related stocks rallied around mid-June following a wave of applications for bitcoin exchange-traded fund, including BlackRock’s (BLK) iShares Bitcoin Trust ETF. In addition, Ripple Labs won a court case against the SEC in July, ruling that its XRP token is a security for institutional sales but not for public sales.

Bitcoin has grown 77% so far this year, trading around $29,250 late Thursday. ARK Invest (ARKK) CEO Cathie Wood took profits and sold off her COIN stock in July.

However, the SEC charged Coinbase with selling unregistered securities in early June and filed a lawsuit against Binance for 13 rules violations. Brian Armstrong, Coinbase’s CEO, told the Financial Times that the SEC asked Coinbase to delist all tokens other than Bitcoin prior to filing the lawsuit, which the SEC denied. In a separate case, a judge ruled that the SEC can proceed with its lawsuit against Terraform Labs for allegedly defrauding investors.

COIN stock slipped 1.2% late Thursday. Shares had been trading near their 21-day exponential moving average before the earnings report. Despite the 156% gain this year, the stock is still trading well below its all-time high of 429.54 from April 2021.

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