Coinbase Stock Drops Nearly 20% After Earnings Miss, Options Market Turns Defensive
Shares of Coinbase (NASDAQ: COIN) tumbled 19.6% last week, closing at $314.69, as disappointing Q2 results reignited concerns about overvaluation and slowing revenue growth. It marked the crypto exchange’s worst weekly performance since September 2024, per TradingView data.
On Thursday, Coinbase posted earnings of $0.12 per share—a staggering 88.8% year-over-year decline. Revenue came in at $1.5 billion, missing the $1.59 billion consensus estimate from FactSet. Transaction revenue fell 39% from the previous quarter, dragging EBITDA down to $512 million.
The earnings shortfall reinforced warnings from crypto research firm 10x, which in June called the stock’s rally overextended and recommended shorting COIN in favor of bitcoin. In early July, H.C. Wainwright downgraded Coinbase to Sell, citing similar valuation concerns.
Options Traders Hedge as Volatility Spikes
In response to the sell-off, options traders aggressively sought downside protection. The one-year put-call skew rose to 2.6% on Friday—its highest level since April—according to Market Chameleon. That means bearish bets now command a notable premium over calls, highlighting growing investor caution.
Put options, which increase in value when a stock falls, have seen surging demand amid uncertainty around Coinbase’s earnings outlook and broader crypto sector volatility.
With Q3 underway and macroeconomic headwinds building, traders appear increasingly inclined to hedge their Coinbase exposure—or steer clear altogether.
