- Coinbase’s Q2 was a success, as the company registered impressive gains.
- Bitcoin’s losses in Q2 did not affect the COIN stock.
- The absence of correlation shows the possibility to use the COIN stock as Bitcoin’s diversifier.
YEREVAN (CoinChapter.com) – Coinbase leading crypto exchange, has reported substantial growth in the second quarter of 2021, despite the crypto market’s bearish incentive in the same fiscal period.
That is because Coinbase’s revenue in Q2 reached $2.2 billion, way ahead of estimates, while Bitcoin, its most traded digital asset, lost 42.8 percent overall in terms of market capitalization. As a result, the Coinbase stock, COIN, posed a great investment diversifier to Bitcoin.
The exchange published the results of Q2 in August. Coinbase beat the Wall Street predictions on every turn and reported over a 1,000% yearly earnings boost. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) adjusted earnings came in at $1.15 billion.
Brian Armstrong, the chief executive of Coinbase, was optimistic about the results and commented during the Q2 2021 Earnings Call.
The COIN stock price declined after the report’s release, while Bitcoin displays bullish price action again.
The Coinbase officials also stated that the volatility on the crypto market could reflect on the COIN stock, but the results of the report claim the opposite, as the crypto market suffered losses in Q2, led by Bitcoin’s decline.
The flagship cryptocurrency had a rough time after Q1, as both the price and the market cap declined drastically since April 2021. The chart below shows the BTC market cap stats throughout the year.
Bitcoin’s daily chart also showed bearish price action, while the token lost more than 40 percent overall in Q2.
The outlook in the past two months was positive for BTC, but the alpha crypto has now entered a consolidation phase for the past week. Low rewards led traders to allocate their assets to other cryptocurrencies. Some experts believe that COIN could be a viable resorse to diversify a portfolio against Bitcoin volatility.
“On top of that, unlike Bitcoin, COIN actually earns and retains significant amounts of profits. As a result, all things being equal with each passing day, COIN’s intrinsic value will increase relative to Bitcoin’s which is a non-cash flowing asset”.reported Samuel Smith, a crypto analyst from High Yield Investor.
…Coinbase acquires revenue from transactions on the platform. As long as the sheer number of transactions grows and the company collects the fees, the transaction vector (buy or sell) is not crucial. Thus, fluctuations of Bitcoin don’t affect COIN, as long as traders engage in any sort of transaction.
“As long as cryptocurrencies are being used and exchanged, COIN is set to see its value continue growing over the long term, even if Bitcoin’s price flounders”.added Smith.