Coinbase Narrows Losses in Q2 despite Declining Trading Volumes

The US-based cryptocurrency exchange Coinbase reduced its net loss to USD $97 million in the second quarter from USD $1.1 billion in the same period of last year. However, the company's net revenue declined 17% year-over-year to USD $663 million during the period.

Coinbase has attributed the improved performance to a reduction in expenses that resulted from the company operating more efficiently. The company's operating expenses declined 1% quarter-over-quarter to USD $664 million. Additionally, the exchange reduced its staff by 30% year-over-year.

Improving EBITDA

Besides that, Coinbase posted an adjusted EBITDA of USD $194 million, an improvement from a negative EBITDA of USD $151 million reported in the second quarter of 2022. However, the EBITDA reported in the period declined 31% quarter-over-quarter from USD $284 million.

Coinbase's total revenue from subscription and services more than doubled year-over-year to USD $335 million in the second quarter. The revenue from the consumer segment was USD $310 million, which compares to USD $17 million from the institutional segment.

Following the results, Coinbase is projecting its subscription and services revenue to be at least USD $300 million in the third quarter. Additionally, the company expects its technology and development, general, and administrative expenses to range between USD $575-625 million in the next quarter.

Coinbase's Future Prospects

"In Q2, we made further progress toward this bold goal such as expanded access to derivatives products to customers outside the US, being selected by many leading asset managers to provide critical infrastructure underpinning their proposed spot Bitcoin exchange-traded funds (ETFs) products," the exchange stated.

Finance Magnates reported last month that the American derivatives and securities exchange network, Cboe Global Markets, had entered into a Surveillance Sharing Agreement (SSA) with Coinbase for the spot Bitcoin ETFs filed on behalf of asset managers, Fidelity, VanEck, WisdomTree, and Invesco.

On top of that, Coinbase highlighted the regulatory challenges it faces in the US related to the lawsuit filed by the regulator, in the report. Coinbase is planning to file a motion seeking the dismissal of the case, which accuses it of operating an unregistered trading platform and offering unregistered securities.

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Crypto Institutionalization Yields Results: CoinShares Records Year's Highest Revenue

The latest financial report from CoinShares International Limited, a major European alternative asset manager specializing in digital assets, highlights the company's impressive performance in the second quarter of 2023. According to the report published today (Tuesday), the company's revenue in Q2 2023 rose by £5 million to £20.3 million when compared to the same quarter in 2022.

CoinShares' Financial and Operational Highlights of Q2 2023

The financial results of the quarter ending on 30 June 2023 show a 33% growth in quarter-on-quarter (QoQ) performance and an adjusted EBITDA of £12.8 million. This marks CoinShares' best quarter in over a year. The comprehensive income for the quarter amounted to £5.3 million, a significant improvement from the loss of £0.6 million recorded during the same period last year.

The Passive Asset Management division was also productive during this quarter, generating £10.6 million in management fees. They amplified their outreach efforts in Germany and Switzerland through targeted events, educating potential investors about cryptocurrencies and Exchange-Traded Products (ETPs).

In terms of operations, CoinShares has seen considerable progress in its asset management business line. The newly established team is currently preparing its first strategy, gathering essential data for a launch planned for the year's end.

"Convergence between traditional and digital finance is well underway. The Group's Q2 performance evidences our ability to take advantage of this convergence," Jean-Marie Mognetti, the Chief Executive Officer of CoinShares, commented.

In addition, the Capital Markets division reported gains and other income of £10.0 million in Q2. Despite the fluctuation in BTC and ETH prices, its proprietary trading strategies effectively balanced the decline in liquidity provisioning income.

"The Impending Institutionalization of the Crypto Landscape"

As the CEO of CoinShares suggested, such a significant improvement in results over the year suggests that the cryptocurrency industry is becoming increasingly institutionalized. Besides the retail traders who used to dominate, there are more and more professional investors in it to whom CoinShares can direct its offer. CoinShares is primarily an ETPs issuer, allowing institutional investors to join the cryptocurrency market as part of regulated financial instruments.

"Recent events in the digital asset industry serve as validation of CoinShares' initial thesis about the impending institutionalization of the crypto landscape and the importance of regulation," Mognetti added.

Over the past year, CoinShares made two significant investments. First, in March 2022, it increased its investment in FlowBank by acquiring an additional 20.8% of shares, increasing the total stake to 29.3%. Then, in July, it took over Napoleon Asset Management after previous approval from the French regulator AMF.

CoinShares is the second-largest provider of cryptocurrency-based instruments after Grayscale Investment, with one of the industry's highest assets under management ratios, which stands at $1.8 billion.

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