Coinbase Exceeds Revenue Projections Despite Challenges

The Breakdown First Five - Friday, August 2, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Bybit Shutters in France

Bybit will exit the French market following regulatory changes that made licenses more difficult to qualify for. Beginning today, French users will be in sell only mode and Earn products will be restricted. Unclosed positions will be liquidated on August 13th. Regulatory changes relate to Europe’s MiCA framework, which will be in full effect in December. The exchange pledged to relaunch in France “in the near future” once licensing is secured. 

4. Microstrategy Clarifies Yield

Microstrategy earnings featured a new metric designed to help investors keep tabs on its Bitcoin strategy. Called Bitcoin Yield, Microstrategy will now disclose the growth in the ratio of Bitcoin held to diluted shares outstanding. The metric is currently running at 12.2% year to date but the company will target 4 to 8% annually moving forward. Earnings for the operating business were soft, with a quarterly loss of $5.74 per share on $111.4M in sales, a 7% year on year decrease.

3. Big Day for Mini-ETF

The Grayscale mini-Bitcoin ETF recorded $191M worth of inflows on Thursday, leading all products for the day. The new product is now the lowest cost offering for buy and hold Bitcoin ETF investors and could represent Grayscale’s last chance to keep a toehold in the market. Judging from the flow data, it seems the mini-Bitcoin ETF is siphoning off demand from the other funds, with Fidelity, Bitwise and Ark all recording major outflows for the day. 

2. Bitcoin Flash Crash

Leverage was wiped out as Bitcoin fell almost 3% in an hour yesterday. Price hit multi-week lows of around $62,000. The weakness comes after Bitcoin failed to respond to news of imminent Fed rate cuts, bogged down by fear of selling pressure from the US Government and Mt Gox creditors. Price has recovered somewhat but is still trading very weak, heading into the weekend at range lows.  

1. Coinbase Beats Estimates

Mixed results for Coinbase earnings, with $1.4B in quarterly revenue, beating estimates. Exchange transaction revenue dropped by 27%. Transaction volume on Base quadrupled. Net income fell to $36M compared to $1.2B in Q1, which included marking up crypto assets according to new accounting standards. Still a big beat on earnings per share, but overall a softer quarter than Q1.