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Coinbase $COIN's Q2 earnings report came out, and after-hours it once dropped nearly 7%. After reading it, it's actually not undeserved. Over the past few years, Coinbase has developed stablecoins, custody, subscriptions, and prediction markets, always trying to shed the label of "making money solely from users trading crypto and paying fees." But as crypto trading cooled down, revenue immediately dropped. Q2 total revenue was $1.22 billion, while the market originally expected about $1.29 billion. Trading revenue fell from $756 million last quarter to $599 million. That's about $157 million less earned in three months. More awkwardly, Coinbase's market share actually rose from 9.1% to 10.3%. Simply put, a higher proportion of people are trading on Coinbase, but the entire crypto market is less active. The overall pie shrank, so even with a bigger share, the fees collected are still less. Subscription and service revenue was $555 million, accounting for 48% of net revenue, which seems to already support half the business. But this revenue also dropped 5% quarter-over-quarter. The higher share partly results from trading revenue falling faster. $USDC is similar. The average $USDC held in Coinbase products reached $20 billion, a new high, but stablecoin revenue dropped from $305 million to $292 million. More money is held, but with interest rates falling, Coinbase still earns less. The prediction market, however, grew rapidly, with contract numbers and revenue more than doubling from last quarter, annualized revenue exceeding $100 million. But $100 million annualized spread over a quarter is about $25 million. Trading revenue dropped $157 million in one quarter, so this new income can't cover it yet. So Coinbase's current problem is clear. The new businesses are launched and indeed used, but the earnings are not enough yet. Adjusted EBITDA is still $208 million, positive for 14 consecutive quarters. The company booked a $360 million loss, including about $210 million in crypto investment losses and over $52 million in restructuring costs. #DailyOrbit