Crypto Isn’t Enough? Coinbase Turns To Tokenized Stocks Following Q2 Letdown, Retail Opts Caution For Now

Coinbase (COIN) has set its sights on offering tokenized stocks and other assets as part of its push to diversify its offerings beyond the crypto trading platform.

“We're currently working towards launching tokenized equities to meet the moment in this new regulatory environment,” CEO Brian Armstrong said in a conference call with analysts on Thursday after posting second-quarter revenue that missed Wall Street’s estimates, hurt by weak trading volatility.

Over time, Coinbase will bring all asset classes on-chain, including prediction markets, real-world assets, he added. Coinbase leaders have previously expressed their vision to make it the top financial services platform in the world across custody, trading, payments, staking, borrowing, and lending.

According to a CNBC report, citing Coinbase’s Vice President of Product, Max Branzburg, the company will launch the offerings within the next few months, first to U.S. users, followed by a “gradual international rollout based on jurisdictional approvals.”

Retail sentiment on Stocktwits about Coinbase was ‘neutral’ at the time of writing, while retail chatter was ‘high.’

The expansion will pit Coinbase against rivals such as Robinhood and Gemini, which have launched their own tokenized equities outside the U.S. “The total addressable market for this is massive. Capturing just 3% of equities trading would double the current crypto market,” Armstrong said.

Coinbase and its rivals are banking on favorable regulatory moves from the Trump administration, which has been friendlier toward the industry compared with the Biden administration. The Securities and Exchange Commission unveiled ‘Project Crypto’ on Thursday to update securities regulations to make room for crypto.

Coinbase stock, however, slipped 9.2% in extended trading on Thursday as the company posted a 2% decline in transaction revenue to $764.2 million. It saw a 16% fall in crypto asset volatility compared to the previous quarter as traders held onto their positions amid a rally in the prices of digital currencies.

Retail traders were largely disappointed with the earnings. “I’m surprised that this stock isn’t down double digits after the quarterly report. Huge run-up and a mediocre at best earnings report,” one trader noted.

Coinbase stock has gained over 47.3% this year, riding on the euphoria around bitcoin and its inclusion in the S&P 500.

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