Coinbase is gearing up to reveal its second-quarter earnings on July 30, with Wall Street bracing for continued pressure. Analysts expect the cryptocurrency giant’s revenue to hit $1.31 billion, marking a 13% drop from last year. Meanwhile, earnings per share are forecasted to tumble 52%, hovering around 15 cents, and some estimates even dip slightly lower.

Trading Volume Stalls, Weighs on Revenue

Investor sentiment appears cautious. Market data from public event contracts hints at a stable but uninspiring trading volume for Coinbase, showing no signs of a major rebound. This aligns with analyst worries that tepid crypto prices have suppressed retail traders’ activity, hurting the platform’s transaction revenue. Expectations are for around $640 million in transaction income, but persistent low asset prices mean Coinbase’s core trading business is under strain.

Revenue Streams Beyond Trading Offer Some Cushion

Not all is bleak. Coinbase’s earnings may get a boost from less volatile sources such as stablecoin-related income, blockchain rewards, and subscription services like Coinbase One. The company projects subscription and services revenue between $565 million and $645 million, and analysts suggest this segment could reach about $601 million. Increased supply and balances of USDC stablecoins appear to be softening the blow from declining spot trading revenue.

Still, expenses loom large. Sales and marketing are forecast between $200 million and $300 million, while tech, development, and administrative costs might total up to $870 million. Coinbase’s international push and derivatives trading could help offset some revenue declines, but the broad trend points toward a more challenging environment.

The latest signals from earnings-specific models show a negative outlook. With a 5.23% Earnings ESP, the data points against an earnings surprise. Coinbase’s headwinds highlight the difficulties exchanges face amid volatile crypto markets and diminished retail trader enthusiasm.

Coinbase and Robinhood Set to Reveal Crypto Market’s Future with Q2 Earnings offers additional context on industry trends influencing the results.

This material is for informational purposes only and does not constitute financial advice.