Crypto Q2 2024 Results 🧪

Mixed results for crypto companies listed on the stock market - Coinbase, Marathon Digital and MicroStrategy. Circle's stocks worth $5B on secondary market. $1B worth tokens unlock expected in August.

Nameet Potnis

Thejaswini M A

, and

Token Dispatch

Aug 02, 2024

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The most important Q2 results are out for crypto.

Coinbase
Marathon Digital
MicroStrategy
Galaxy Digital

These companies aren't having the best quarter.

The crypto market cooldown has directly impacted their profits.

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Coinbase - Mixed Bag

Revenue: $1.45 billion. 11% decrease compared to Q1. More than doubled year-over-year.
Net income: $36 million. Significant drop from nearly $1.2 billion in Q1.
Consumer transaction revenues: $665 million. 29% decline compared to Q1.
Base transaction growth: 300% quarter-over-quarter.
Stablecoin revenues: Over $240 million. Increase from $197.3 million in Q1.
Solana: Made up 10% of overall transaction revenues.
Adjusted EBITDA: $596 million. Significant decline from $1.01 billion in Q1.
Crypto asset losses: $319 million pre-tax due to lower crypto prices.

While trading volume dipped, Coinbase's stablecoin business, particularly USDC, saw a significant boost, contributing to a healthier bottom line.

The company's balance sheet swelled to $7.8 billion, a $733 million increase.

"Advancing crypto legislation is now a mainstream issue. Politicians on both sides of the aisle have taken notice, and there is real energy in both the House and Senate around passing legislation ... We will continue driving this forward through the fall elections and beyond."

The company's efforts to influence policymakers through its Stand With Crypto initiative seem to be paying off - enlisted over 1.3 million “crypto advocates.”

Marathon Digital - Rough Quarter

Net loss: $199.7 million (compared to $9 million loss in Q2 2023).
Total revenue: $145.1 million (up 78% year-over-year).
Share price: Fell 7.78% on Thursday.
Bitcoin production: Decreased 30% compared to Q2 2023 due to equipment failures, transmission line maintenance, increased global hash rate, and bitcoin halving.
Installed hash rate: Reached all-time high of 31.5 EH/s, aiming for 50 EH/s by end of year.
Bitcoin holdings: Purchased $100 million worth of bitcoin, adopting a full "HODL" strategy.
Bitcoin sales: Sold 51% of bitcoin produced to fund operating costs.
Why the loss? A mix of bad luck and industry challenges. Equipment failures, a dip in Bitcoin production due to the halving, and higher costs all played a part.
Stock price? Not happy. Shares dropped significantly after the news.
Plan going forward? Marathon is aiming to increase its mining power and is also holding onto more Bitcoin rather than selling it.

MicroStrategy - Not great

MicroStrategy, the business intelligence firm led by Bitcoin bull Michael Saylor, is continuing its all-in bet on crypto. The company has increased its Bitcoin holdings to a staggering 226,500 coins, worth approximately $8.3 billion.

A new metric: BTC Yield. In a bid to justify its Bitcoin strategy, MicroStrategy has introduced a new metric: BTC Yield.

This measures the percentage change in the ratio of Bitcoin holdings to diluted shares outstanding. The company aims for a 4-8% annual BTC Yield over the next three years.

Galaxy Digital - Not Impressive

The overall crypto market took a dip, and that directly affected Galaxy's trading and investment activities.

Net loss: $177 million (almost four times Q2 2023).
Revenue decline: Counterparty trading revenue down over 50% to $24 million.
Mining revenue: Up 2% to $24 million, but profit margin decreased.
Assets under management: $4.6 billion.

Company Developments

Incorporation and listing: Process ongoing in Delaware, aiming for Nasdaq listing.
Acquisition: Purchased almost all assets of CryptoManufaktur, including $1 billion in ETH.
ETF offerings: Spot bitcoin and ether ETFs listed in partnership with Invesco.

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Block That Quote 🎙️

Tennessee Senator Bill Hagerty (R-TN).

"We need to make certain that it [crypto] happens here in America."

Hagerty is backing Trump’s push to make the US a major crypto hub.

Believes America needs to lead in crypto innovation.
Not push it offshore like the semiconductor industry.
Accuses the Biden administration of driving crypto away.
The government has also failed to provide proper regulations.

He likes Trump’s plan to fire SEC Chair Gary Gensler too.

"We need to see this innovation happening here. We want it to evolve here. We want to create the ecosystem for it to thrive here … [White House] has done everything they can to attack this industry."

Circle worth $5B+ on secondary market?

Circle, the company behind the popular stablecoin USDC, is gearing up for another attempt at going public.

Private Valuation: Circle's private stock is currently valued between $5 billion and $5.25 billion on the secondary market.
Limited Trading: Trading of these shares is restricted and only allowed under specific circumstances.
Potential Sellers: Early investors and Circle employees looking to cash out before the IPO are likely sellers.
IPO Plans: The company has filed confidential paperwork to go public through a traditional IPO.
Previous Attempt: Circle previously attempted to go public via a SPAC merger in 2021 but ultimately terminated the deal.
Valuation Growth: The company's valuation peaked at $9 billion in February 2022.
USDC Dominance: Circle's USDC holds a significant market share of nearly 21% in the stablecoin market, with a market capitalisation of $33.6 billion.

USDC's market capitalisation rose by 5.4% to $33.6 billion.

USD Coin (USDC) trading volume increased by 48% in July to $135 billion.

Read: Tether's $5.2 Billion Profit 🚀

In The Numbers 🔢

$1 billion

The worth of tokens that are expected to be unlocked in August.

Set to be a significant month for token unlocks in the crypto market. Large token unlocks can influence market prices due to increased token supply.

Major players: Wormhole and Avalanche lead the pack with combined unlocks of approximately $450 million.

Other notable unlocks: ZetaChain, Optimism, Sui, dYdX, ImmutableX, Aptos, The Sandbox, StarkNet, Arbitrum, and several others will also unlock significant amounts of tokens.

Block Inc. Q2 2024 - Bitcoin revenue $2.61B

A 52% increase year-over-year driven by a rise in Bitcoin prices.

Bitcoin gross profit was $67 million. The total sale amount of bitcoin sold to customers, considered as bitcoin revenue, was $2.61 billion.

Bitcoin gross profit was 3% of bitcoin revenue.

Total net revenue: $6.16 billion, an 11% growth compared to Q2 2023. Excluding Bitcoin, revenue was $3.54 billion, up 13%.
Cash App performance: $4.13 billion in revenue, with Bitcoin gross profit of $67 million, marking a 52% increase. Excluding Bitcoin, revenue was $1.52 billion.
Gross profit and net income: Rose 20% to $2.23 billion. Net income attributable to common shareholders was $195 million, up from $102 million last year.
Bitcoin holdings: As of June 30, 2024, Block held approximately 8,211 BTC valued at $515 million, having acquired 173 BTC in the quarter.
Debt offering: Block raised $2 billion in senior unsecured notes, increasing its available liquidity to $10.3 billion, for debt repayment, acquisitions, and other strategic initiatives.

The Surfer 🏄

Montenegro's appeals court has ruled that Do Kwon, former CEO of Terraform Labs, will be extradited to South Korea and not US. The court denied US request for extradition, in line with the decision of the Podgorica High Court in June.
Aptos Foundation and OKX Ventures have launched a $10 million ecosystem growth fund to boost the Aptos blockchain. To accelerate the growth of the Aptos ecosystem and promote widespread adoption of Web3 technologies.
Bybit is exiting the French market due to new EU crypto regulations, effective August 13. French users will only be able to withdraw funds, with accounts switching to a “close-only” mode.

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