Coinbase Reports Earnings Thursday. Here’ s What to Expect.

That’s wider than the second quarter’s per-share loss of 42 cents, but much better than the $2.43 per-share loss the company suffered in the third quarter of last year, when the crypto market crash was deepening.

Coinbase and other crypto companies have experienced a litany of crises after the market peaked in 2021. The market crash has dampened activity from the platform’s retail customers, whose trades make up the biggest chunk of Coinbase’s revenue. Analysts expect volume from such customers to hit its lowest point ever in the third quarter.

The good news for Coinbase and the broader industry is the low-volume, rangebound trading that has dominated the market for months might be going away. In October, the price of Bitcoin spiked 28% to $34,400 on speculation that the Securities and Exchange Commission might soon allow a spot Bitcoin exchange-traded fund to come to market.

The surge has been accompanied by a rise in volumes, and exchanges hope the momentum can continue as the crypto market prepares for the Bitcoin “halving” event that is expected next April. In a halving, the amount of Bitcoin that miners receive for maintaining the network drops by 50%, an event that in the past has been accompanied by crypto bull markets.

Coinbase in September also launched “perpetual futures” for non-U.S. customers. Such futures allow investors to easily make leveraged bets on tokens.

Even with those positive signs, Coinbase has its own set of unique problems. The SEC in June sued the platform, alleging that it operates an unregistered securities exchange, a charge the company denies. Some analysts say the regulatory crackdown, in a worst-case scenario, could wipe out more than a third of Coinbase’s revenue.

Coinbase didn’t respond to a request for comment.

In the past, Coinbase executives have said they think they’ll defeat the SEC, and that they’re trying to expand the company beyond trading to be more of a central hub for all things crypto-related. To that end, they have launched a staking service to allow investors to post tokens in exchange for yield. The company has also launched its own blockchain, called Base, that developers can build on.

The long-term success of Coinbase stock might depend on solving its regulatory issues. But in the short-term, a crypto bull market won’t hurt.

Write to Joe Light at [email protected]