Strategy, Coinbase post weak Q2 earnings amid prediction market growth for the exchange

• Strategy reported an $8.33 billion Q2 operating loss, driven largely by an $8.32 billion unrealized loss on its Bitcoin treasury.
• Coinbase revenue drops 14%, but it expanded market share to 10.3% and grew prediction markets revenue 106% QoQ.
• The company reduced reliance on Bitcoin trading fees, with non-Bitcoin spot trading revenue accounting for 88% of Q2 net revenue.

Strategy (MSTR) reported an $8.33 billion operating loss in the second quarter of 2026, according to its earnings report released Thursday. The losses were largely driven by an $8.32 billion unrealized loss on its Bitcoin (BTC) holdings as the top crypto's price declined during the period.

Bitcoin unrealized losses weigh on Strategy's Q2 results

The company also reported an $8.22 billion net loss for the quarter, or $24.45 per diluted share. Net loss attributable to common stockholders stood at $8.62 billion after accounting for $400.7 million in preferred stock dividends.

Despite the quarterly loss, Strategy continued expanding its Bitcoin treasury. The company currently holds 843,775 BTC, with a total cost basis of $63.69 billion. Strategy noted that it achieved a 4.5% BTC Yield year-to-date, representing a BTC Gain of 29,997 Bitcoin and a BTC dollar gain of $1.95 billion based on the July 27 market price.

“In the second quarter of 2026, Strategy strengthened its balance sheet while navigating a meaningful Bitcoin price decline,” said Strategy CEO and President Phong Le.

He added that the company increased its Bitcoin holdings by 11% to approximately 846,000 BTC during the quarter, reduced convertible debt by 18% to $6.7 billion and increased its USD Reserve by 12% to $2.4 billion.

Strategy's financial results also showed growing reliance on its preferred stock and capital markets programs. The company raised $7.53 billion through STRC issuances year to date and has paid $1.06 billion in cumulative dividends across its preferred stock.

Its USD reserve now stands at $3.75 billion, providing more than 2.1 years of coverage for preferred dividends and interest obligations. It also repurchased $28.9 million in aggregate notional STRC for $25 million, representing a 13% discount to par.

Andrew Kang, Strategy's chief financial officer, said the company has maintained 18 consecutive months of dividend payments despite Bitcoin's recent drawdown. He added that Strategy's BTC Hurdle ARR, which represents its current effective cost of credit, stands at 10.8%.

The company said it will continue selling BTC when advantageous to replenish its reserve. It also added that future capital raises will not be focused solely on purchasing Bitcoin.

MSTR rose 4.73% on the day, although the stock began trading downward after market hours.

Coinbase revenue drops 14% but sees prediction markets boost

Coinbase also reported a weaker Q2 with revenue declining to $1.2 billion, marking a 14% QoQ decline. It also posted a net loss of $359 million, or $1.36 per share, missing market estimates of a $0.01 loss.

Despite the weak revenue, the company continued reducing its dependence on Bitcoin spot trading fees and expanded into other crypto-related financial services in Q2.

The exchange achieved a record 10.3% crypto trading volume market share, up from 9.1% in Q1 and marking its third consecutive quarter of gains. Prediction markets contracts and revenue also grew 106% quarter over quarter, surpassing $100 million in annualized revenue.

Coinbase said 88% of its net revenue in the quarter came from sources excluding Bitcoin spot trading. Subscription and services revenue reached $555 million, accounting for 48% of net revenue.

Average USDC held across Coinbase products reached an all-time high of $20 billion, representing more than 30% of circulating USDC at the end of the quarter.

The company also delivered its 14th consecutive quarter of positive adjusted EBITDA.

COIN traded at $163 on Thursday, registering a 2% gain, but flipped to a 5% decline in after-hours trading after the weak earnings report.