Coinbase Global Inc. (Nasdaq: COIN), shares dropped by 19.6% last week, falling to $314.69. This was the company’s biggest weekly loss since September 2024. The drop followed a weaker-than-expected earnings report and rising pressure in the crypto market.
The sell-off came after Coinbase released its second-quarter results, disclosing that the exchange’s profits and revenue both fell short of market forecasts. At the same time, more traders began to buy protective options, showing growing concern about further losses in the stock.
On Thursday, Coinbase reported a net operating earnings per share of just $0.12. This was nearly 89% lower than the same time last year. Revenue came in at $1.5 billion, missing the $1.59 billion forecast from FactSet, a global provider of financial data and analytics.
Transaction revenue, which makes up a large part of Coinbase’s business, dropped 39% from the first quarter. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) also dropped to $512 million–as noted by Marketscreener.
In June, crypto research firm 10x said the rally in Coinbase’s share price did not match the company’s performance. The firm suggested shorting the stock while buying Bitcoin. H.C. Wainwright, an investment company, also downgraded Coinbase from “Buy” to “Sell” early last month. They said the stock had risen too fast without enough backing from real results.
Put Options Signal Growing Caution
As the stock dropped, more traders turned to put options to limit possible losses. These options serve as insurance. By Friday, the one-year put-call skew rose to 2.6%, the highest level since April. This means traders were paying more for put options than for call options, showing rising demand for protection.
Coinbase is now under pressure to show stronger results in the coming months. Trading volumes have dropped, and some investors are waiting to see if the company can recover. Others may view the dip as a possible buying chance, especially if crypto prices recover or if new products are launched. For now, the stock remains under close watch.
Also Read: Coinbase UK Ad Ban Sparks Crypto Debate, Says CEO Brian Armstrong
