Coinbase Global Inc posted a profit and revenue doubled, as this year’s cryptocurrency recovery carried into the second quarter.  

The biggest US crypto exchange’s revenue jumped to US$1.45 billion, slightly above the forecast of analysts surveyed by Bloomberg. Net income was US$36 million, or 14 cents a share, after taking in account an impairment charge to writedown the value of cryptocurrencies held in its investment portfolio. It has a loss in the year-ago period. 

Coinbase expects current-quarter subscription and services revenue to be between US$530 million and US$600 million. In July, the company generated approximately US$210 million of total transaction revenue, Coinbase said in a shareholder letter. Amid a slowdown in trading, Coinbase’s non-trading businesses, such as interest income related to the USDC stablecoin, have gained in importance in driving growth.

“There’s volatility within spot market trading; it’s going to ebb and flow, and our energy is going into creating more and more diversified revenue stream,” chief financial officer Alesia Haas said in an interview. “This was a strong quarter of execution for Coinbase. Our results show we are an all-weather company, with revenue diversification.”

Revenue was down 11% from the first quarter, as the rally in crypto slowed. Coinbase makes a large portion of its revenue from trading fees, and many retail traders began to sit on the sidelines, as prices went south after Bitcoin hit an all-time high in March. 

The company reduced the value of crypto assets in its crypto investment portfolio by US$319 million. Coinbase adopted a new accounting rule, requiring companies to mark digital assets to market value each reporting period, in the first quarter.

Coinbase is still facing uncertainty over a lawsuit filed against it by the Securities and Exchange Commission last year. US elections this fall add another wrinkle, as Coinbase and other crypto companies try to push new crypto-friendly regulation through legislature.

Coinbase’s shares rose nearly 3% to about US$212 in after-hour trading. The shares are up 22% this year.

“Coinbase’s return to profitability should be sustainable, even with more modest activity and stable crypto prices,” Bloomberg Intelligence analysts wrote in a note.

  - Bloomberg