Is market price evaluation of the coin price good? Coinbase's second-quarter EPS significantly declines.

The U.S. compliant exchange Coinbase has released its second-quarter financial report, showing a total revenue of $1.4 billion due to the overall decline in the cryptocurrency market value, down from $1.6 billion in the previous quarter. Coinbase adopted the fair value accounting standard for cryptocurrencies this year, but with the decline in cryptocurrency prices this quarter, the EPS dropped significantly to $0.14.

Trading Revenue Declines, Subscription and Service Revenue Increase

In the second quarter, total revenue dropped to $14 billion, down from $16 billion in the previous quarter, mainly due to the decline in trading revenue, reflecting the overall sluggishness of the cryptocurrency market in the second quarter.

In the second quarter, subscription and service revenue reached $5.99 billion, a 17% increase from the previous quarter. Compared to the previous quarter, subscription and service revenue benefited from higher average USDC platform balances and USDC market values, as well as higher average cryptocurrency asset prices, especially SOL and ETH. Blockchain rewards revenue also showed good growth.

EPS Plummets to $0.14 Due to Cryptocurrency Price Impact

The Financial Accounting Standards Board (FASB) announced new accounting standards last September, allowing companies holding cryptocurrency assets like MicroStrategy to show the market value of their cryptocurrency assets in their financial statements.

FASB implemented fair value accounting standards by the end of the year, benefiting companies holding cryptocurrency assets like MicroStrategy.

In the first quarter, Coinbase recognized a gain of $650 million for "investment-held cryptocurrency assets," resulting in a net profit of $1.176 billion and an EPS of $4.4. However, in the second quarter, due to the decline in cryptocurrency prices, they reversed $319 million, causing EPS to plummet to $0.14. This significant fluctuation in cryptocurrency prices demonstrates the significant impact on the financial statements of publicly traded companies.

Coinbase Holds Nearly 9,000 BTC and 110,000 ETH

According to previous reports, Coinbase holds various cryptocurrencies such as Bitcoin, Ethereum, SOL, etc., for long-term investment, operational purposes, borrowed cryptocurrency assets, and related collateral.

As of 6/30, holdings for long-term investment include:

• Bitcoin: 8,999 coins, down from 9,183 coins at the end of March
• Ethereum: 112,024 coins, up from 96,086 coins at the end of March

SOL Included in Financial Report for the First Time, Accounting for 10% of Trading Revenue

In this report, Coinbase for the first time included Solana SOL's trading revenue in its financials, with SOL trading revenue accounting for 10% of its total trading revenue.