Coinbase Global ( COIN ) had been on a tear this year.
The stock was up more than 52% since Dec. 31, 15th among stocks in the Standard & Poor's 500 Index.
That performance is still tops among stocks in the S&P 500 Financial sector, ahead of such giants as Citigroup ( C ) , Bank of New York Mellon ( BK ) and Charles Schwab ( SCHW ) .
Coinbase was added to the S&P 500 only on May 19, replacing Discover Financial, which merged with Capital One Financial ( COF ) .
But shares fell nearly 8% from a regular close of $377.76. The company reported results that came up short of estimates.
Revenue was down slightly at $1.5 billion. Transaction revenue of $764.3 million missed Street estimates for $814 million. Retail trading volume was $43 billion, compared with estimates of $48.05 billion.
Subscription revenue was $655 million, compared with a consensus estimate of $705 million.
Operating expenses were up 15%, largely because of costs from a data-theft incident disclosed in May.
The net income estimate was $319 million. The actual was more confusing. It was $1.4 billion. It included a $1.5 billion gain on "strategic investments" and a $362 million gain on crypto investments. But the adjusted net was $33 million.
What makes Coinbase unique is that it is a cryptocurrency exchange and a lot of other things. But not a bank. Its has capitalized on the soaring value of bitcoin, which closed at 116,778, down slightly on the day. It is still up 25% on the year and more than 608% from the end of 2022.
A smartphone displays the logo of Coinbase Global in front of a screen showing the company's latest stock market chart.
Cheng Xin/Getty Images
Plus, large financial institutions have won regulatory approval to create spot bitcoin exchange-traded funds.
Coinbase Teases 'Everything' Expansion
Aside from the strong earnings showing, Coinbase also provided investors with a small glimpse of what Life After the Crypto Bill will look like.
Namely, how it plans to seize on regulatory clarity to expand beyond crypto and into other asset classes.
Representatives for the company told TheStreet it is actively building and testing a new product called the Everything Exchange. This will allow users to trade traditional stocks, prediction markets, foreign exchange, treasuries, commodities, and more directly on the Coinbase platform.
Coinbase plans to power these new features with tokenization, which has already found a grand slam use case in stablecoins.
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Today, stables like Tether and USD Coin (which is issued by Coinbase and Circle) are already widely adopted. Soon, industry participants believe that a token takeover will expand to blockchain, allowing users to trade all of their favorite assets on-chain.
The new Everything Exchange is anticipated to be a product built on top of its in-house blockchain, Base.
Among other things, reports have shown that the company has big plans in store for the Base App. The company is eying an expansion of the current Base Wallet to include social, messaging, and other app support. The new features are expected later this year.
Its not the only wall that the company looks to be knocking down. On Wednesday, Bloomberg reported that Coinbase reached a deal with JPMorgan Chase ( JPM ) , allowing customers to link their accounts to their crypto wallets.
The direct dealing will cut out data aggregators like fintech Plaid, creating a direct data pipe between the exchange and Americas largest bank amid a crackdown on data access at the bank.
Its a big step forward for the exchange, which only years back was unable to accept transactions from the bank, which cited fraud for freezing transactions outbound to the exchange.
