Crypto Winter Bites Back: Coinbase Feels the Chill as Market Momentum Slows
Another crypto winter? Coinbase shares take a hit as trading volumes freeze over.
Market blues hit exchange giant
Retail traders hibernating, institutional players playing wait-and-see—and Wall Street's favorite volatility cash cow isn't milking itself. Trading revenue down 30% last quarter, but hey, at least their NFT marketplace is... oh wait.
The irony? While traditional finance scoffs at 'risky' crypto, their own Q2 earnings got wrecked by—you guessed it—overexposure to crypto-adjacent garbage bonds. Glass houses, much?
Crypto slowdown drags Coinbase down
The weak results were tied directly to slower trading. Coinbase struggled with low trading volumes throughout the quarter as the recent bullish sentiment in crypto markets made traders hold onto assets instead of selling. Less trading meant less revenue for the exchange, and that hit profits hard. The volatility that Coinbase normally benefits from just wasn’t there during the period.
Meanwhile, Robinhood reported that its crypto trading revenue nearly doubled during the same quarter. Robinhood has a much smaller presence in the crypto market than Coinbase, but it managed to pull ahead due to a spike in trading activity. That contrast only deepened the pressure on Coinbase to explain the drop.
Some analysts think the slowdown may be temporary. Coinbase’s revenue estimates for July pointed to stronger activity, likely boosted by the Genius Act, which became law that same month.
The legislation fueled a new wave of crypto optimism, sending Bitcoin to an all-time high and possibly reigniting the kind of trading activity Coinbase needs to recover. But none of that helped the company on Friday, when investors responded directly to the second-quarter collapse.
The earnings miss also hit other crypto-related stocks. Circle fell 4%, Galaxy Digital dropped 2%, and Bitmine Immersion, which holds ether reserves, tumbled 8%. MicroStrategy, which holds a large bitcoin treasury, lost 5%. Coinbase was the worst hit among them all.
Amazon slips after earnings call disappoints Wall Street
Amazon also took a beating. The company released its second-quarter earnings on Thursday and beat expectations in most categories, but it wasn’t enough. The stock dropped during the conference call and closed 7% lower on Friday. For the year, it’s now down around 1%, a rare position for a company that usually stays on the green side of the chart.
The market’s reaction made it clear that beating estimates alone wasn’t enough anymore, not without stronger signals on growth, margins, or strategy going forward.
At the same time, crypto markets were hit by a broader pullback after President Donald TRUMP introduced a revised version of his “reciprocal” tariffs targeting multiple countries.
Bitcoin managed to stay roughly flat, but other top tokens didn’t. Ether, XRP, and Binance Coin all lost 2%. Overnight, bitcoin touched $114,110.73, triggering long liquidations across the board. That means traders using leverage were forced to sell when the price dropped.
Bitcoin saw $172 million worth of these forced sales in 24 hours. Ether lost even more, with $210 million in liquidations on centralized exchanges.
Even after a strong July, where bitcoin ROSE 8% and ether soared 49%, the mood has changed. Uncertainty is back. Lower trading volumes and higher volatility in August are making investors nervous. That has everyone watching whether the momentum will last.
ETF flows also showed cracks. Ether ETFs pulled in over $5 billion in July. There was only one outflow day—July 2, when $1.8 million came out. That pushed cumulative inflows for ether ETFs to $9.64 billion. But bitcoin ETFs saw the reverse. $114 million left bitcoin ETFs on the last day of July, dropping the monthly net inflow to $6 billion. That’s out of a total of $55 billion that’s gone into bitcoin ETFs overall so far.
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