Coinbase stock hits three-month high following 1,000% yearly earnings boost

Coinbase report
“Stellar Lumens Coinbase” by Cryptodost is licensed under CC BY 2.0

Key Takeaways:

  • Coinbase Global Inc. released a quarterly report on August 10, which reflected a solid growth compares to the Q1 stats.
  • The company’s stock COIN posted a delayed rally Wednesday on the optimistic news.
  • It was down 3.85% in the previous session.

YEREVAN (CoinChapter.com) – Coinbase Global, Inc. released its quarterly earnings report on Tuesday.

However, despite the high sales and profits, the price of Coinbase stock, COIN, tanked 3.85 percent to close the session to close at $269.67. Meanwhile, it continued its climb in the pre-market session Wednesday, eventually resulting in a positive open after the New York opening bell.

COIN reached $290.50 in the early morning session, which was its highest level almost three months. However, a sell-off correction ensued at the local top, leading the share’s value down.

Coinbase second quarterly report

Wall Street earlier forecasted Coinbase’s total revenue to amount to $1.85 billion in Q2. But the crypto exchange beat the prediction by 19 percent and registered total revenue of $2.2 billion, logging more than 1,000 percent in gains year-over-year.

Adjusted earnings came in at $1.15 billion before taxes, interest, amortization, and depreciation. The prior prediction stood at $854 million.

The number of transaction users on the platform rose drastically from 6.1 million in Q1 to 8.8 million in Q2. Transaction volumes grew 21 percent compared to Q1 and constituted $145 billion in total.

Brian Armstrong, the founder, and CEO of the largest crypto exchange, commented on the report during the Q2 2021 Earnings Call.

“Q2 was a really strong quarter for us. We had amazing growth in terms of users added to the platform, assets on the platform, revenue, just about everything”.

he asserted.

However, despite the successful quarter, the stock value of Coinbase Global declined right after the company released the report on August 10.

Also read: Coinbase whales behind the latest Bitcoin bull run towards $47K, data suggests.

Tanked stock price

In hindsight, after going public in mid-April 2021 and scoring a listing on the Nasdaq stock exchange, Coinbase’s stock price has been choppy. Alesia Haas, the exchange’s chief financial officer, has cited the volatility on the crypto market as one of the factors for the fluctuating stock price.

The stock value gained a whopping 23 percent in the week preceding the report, as early August daily volumes ran 80 percent above the July stats. However, the price dropped 6 percent right after the release.

Coinbase stock price. Source: COIN on TradingView.com
Coinbase stock price. Source: COIN on TradingView.com

There are several reasons for the stock price to descend on the release date of a bullish report. One of them is a move called “Buy the rumor, sell the news.” The traders acquire the stock, pumped on high expectations. Once their expectations are met and more, some traders choose to cash in on their profits.

Facebook Inc. faced a similar predicament back in 2017. In the days preceding the Q3 report, the stock value rocketed on the bullish predictions. After the company released the report, the traders chose to lock in their gains, and Facebook saw a big sell-out.

Also read: Holo Price Follow Up 19: HOT turns overvalued following a 170% price boom.

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