Coinbase (COIN) shares fell roughly 7% in after-hours trading on Thursday despite the crypto exchange reporting strong growth in its prediction market segment and record trading market share.
Prediction market contracts and revenue more than doubled during the second quarter, growing 106% quarter over quarter and surpassing $100 million in annualized revenue, according to Coinbase's earnings release. The company said binaries products launched late in the quarter tripled daily traders and quadrupled daily revenue compared to numbers from May.
Coinbase also captured a record 10.3% share of global crypto trading volume in the second quarter, up from 9.1% in the prior quarter, marking its third consecutive quarter of market share gains despite a slowdown in trading activity across the industry.
The results come nearly a year to the day after Coinbase unveiled its "Everything Exchange" strategy, an effort to expand beyond crypto trading into businesses including prediction markets, tokenized equities and derivatives.
One year later, the company is pointing to growing traction across those newer business lines as it works to reduce its dependence on bitcoin trading volumes.
"In Q2 we hit our third consecutive all-time high in crypto trading volume market share, proving our Everything Exchange can deliver in all market conditions," CEO Brian Armstrong said. "Coinbase is no longer a bet just on the price of Bitcoin. All of financial services are getting updated by crypto, whether that's trading or payments or lending, and Coinbase is the best-positioned company in the world to power this."
Coinbase's stablecoin business also continued to expand. The average USDC held in Coinbase products reached a record $20 billion during the quarter, which equates to more than 30% of the USDC in circulation.
Subscription and services revenue climbed to $555 million, accounting for nearly half of its net revenue, while the exchange said 88% of its net revenue now comes from sources outside of bitcoin (BTC) spot trading.
Coinbase also posted its 14th consecutive quarter of positive adjusted EBITDA, citing increased productivity from AI adoption across its engineering teams.
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