Late last week, Marqeta said it is expanding its work with Coinbase (NASDAQ:COIN) so businesses can offer cards funded by stablecoin balances. Coinbase will provide the custody, the conversion into dollars, and the settlement on its Base blockchain.
It is a modest deal, yet it shows what Coinbase wants to become: infrastructure for moving money, not only a place to trade bitcoin. But the numbers still move with crypto prices. Second-quarter revenue came in at $1.22 billion, down from $1.50 billion a year earlier, and Coinbase lost $359.5 million, its third straight quarter of missed forecasts, according to CNBC.
Coinbase runs a platform where consumers and institutions trade crypto, equities, and prediction markets, and it earns fees on that trading. It also earns money from stablecoin balances, staking, and other services. The facts suggest the business is shifting toward institutions faster than the loss implies, though a crypto recovery still decides how much that shift is worth. Investors who want more crypto stocks can find Coinbase in our recent list, 9 Best Bitcoin Stocks to Buy Now.
Institutions Are Paying More as Retail Pays Less
The split inside trading revenue is the clearest sign of the shift. Consumer transaction revenue fell 31% from a year earlier, to $451.7 million in the second quarter. Institutional transaction revenue rose 65%, to $100.1 million.
Institutional revenue is still far smaller than consumer revenue, so that growth has not yet made up for the retail drop. But it points to a different kind of customer, one Coinbase can serve with derivatives and payments instead of relying on retail traders to keep showing up.
The surprise is that the part of the business meant to cushion trading also shrank. Subscription and services revenue, which includes stablecoin income and staking, fell 12%. Coinbase said in its filing that lower interest rates cut stablecoin revenue, even as customers held more USDC.
Because trading revenue fell by more, that group still grew as a share of net revenue, to 48%. Payments are where Coinbase is putting new effort. If you’re looking for more companies tied to digital payments, check out 7 Best Fintech Stocks to Buy as Digital Payment Volume Surges.
Costs Still Outrun Gross Profit
Coinbase’s gross margin was 60.31% over the past 12 months, so it keeps most of each sales dollar before operating costs. Those costs then pushed the operating margin to negative 37.56% over the same period.
The worry behind the stock’s slide is that gap, and accounting makes it harder to read. CNBC noted that Coinbase marks its large crypto holdings to market prices, so reported earnings swing widely even when no assets are sold.
Coinbase has responded with a round of job cuts earlier this year. But cuts do not change the main issue, which is that results still rise and fall with how much people trade. Revenue grew about 41% a year over the past five years, so the recent drop is a sharp reversal of that pace.
The objection holds for now, because cost cuts and institutional growth soften the loss but do not yet replace what retail traders pulled out.
Investors Are Pricing Coinbase on a Recovery
Coinbase’s forward price-to-earnings ratio, which divides the share price by expected adjusted earnings for 2026, is listed as not meaningful. In plain terms, the stock isn’t priced on earnings at all, because there is no usable earnings figure to divide by. For comparison, the median stock in its sector trades at a forward P/E of 10.88.
Hedge funds and short sellers fill that gap. A hedge fund holder count shows how many professional funds own the stock at quarter-end. Coinbase had 62 in the second quarter of 2026, down from 65 in the first quarter. For investors watching where sentiment is turning cautious, our list of 10 Stocks Investors Are Running Away From is worth a look.
Short sellers borrow shares and sell them, hoping to replace them at a lower price, and 11.08% of Coinbase’s shares outstanding are sold short. Those investors are betting the stock falls further, which fits a business whose results still depend on crypto trading picking up.
So the Marqeta deal fits Coinbase’s story, but it will not carry the stock alone. The institutional and payments pieces are growing while the retail piece shrinks, and a shareholder is paying for that recovery before it shows up in profit. The thing to watch in the report due at the end of this month is whether institutional transaction revenue keeps climbing while consumer revenue stops falling.
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This article is originally published at Insider Monkey.
