Shares of cryptocurrency exchange Coinbase plunged 11% on Friday in Frankfurt trading, following the release of its second-quarter earnings report that showed a decline in adjusted profit. The drop comes as a reflection of investor disappointment over weaker-than-expected trading volumes, despite moderate gains in the company’s subscription and services revenue.
On Thursday, shortly after the earnings release, Coinbase’s U.S.-listed shares fell nearly 7% in after-hours trading, signaling a broader market reaction that spilled into European markets the following day.
According to Coinbase, adjusted earnings for Q2 fell, driven primarily by a decline in crypto trading activity, which remains the core of its revenue model. Although the company witnessed a year-over-year rise in income from subscriptions and services—such as custody and blockchain rewards—that wasn’t sufficient to offset losses from dwindling transaction fees.
“Market volatility and reduced investor engagement in crypto trading continue to impact our performance,” Coinbase said in a statement, pointing to broader trends in the digital asset ecosystem.
Industry analysts noted that while Coinbase is diversifying its revenue base, its reliance on trading volume remains a significant vulnerability, especially in periods of low market activity or declining cryptocurrency prices.
Investors are also closely monitoring the company’s future outlook, regulatory challenges in the U.S., and its global expansion strategies. Despite the recent dip, some analysts believe Coinbase is well-positioned for long-term growth, especially as institutional interest in digital assets increases.
Coinbase shares have had a volatile 2025, reflecting the uncertainties facing the broader crypto sector. With Q3 underway, all eyes are now on whether market sentiment and trading activity rebound in the coming months.