Coinbase Q2 Report on XRP and Ethereum Trading Trends

Coinbase’s retail trading volumes significantly declined in Q2, yet XRP generated more consumer transaction revenue than Ethereum, continuing a trend from Q1.

According to Coinbase’s Q2 shareholder letter, XRP accounted for 13% of consumer transaction revenue, slightly outpacing Ethereum at 12%. This was a change from Q1, where XRP’s share was lower at 10%, with a brief surge to 18%.

Overall transaction revenue decreased by 39% quarter-over-quarter to $764 million, with total net revenue falling short of expectations at $1.5 billion compared to a consensus of $1.59 billion.

Juan Leon, a research analyst at Bitwise Asset Management, stated that the SEC’s withdrawal of its appeal in the Ripple case in Q1 affirmed that XRP’s secondary-market sales were not considered securities. This legal victory sparked a rally in XRP’s price and increased retail interest in the token.

XRP’s trading share on Coinbase steadily increased from under 10% throughout 2024. The token’s jump in Q1 was accompanied by a wave of traders seeking value due to the newfound legal clarity.

However, this rally was not sustained. Leon explained that price momentum diminished in Q2 as Ethereum regained traction from institutional flows and renewed interest in its ecosystem.

THE decline in regulatory or product catalysts led retail traders to return toward Ethereum, where stablecoin activity and DeFi usage were on the rise. Leon attributed the recent Ethereum rally to the passage of the GENIUS Act and burgeoning tokenization narratives, noting that Ethereum secured a 38% return in Q2 compared to XRP’s 11%.

Ethereum’s resurgence in Q2 wasn’t solely driven by retail activity. “Demand for Ethereum is surging due to inflows from ETFs and purchases by Ethereum treasury companies,” Leon remarked, indicating strong institutional demand for ETH that is likely to continue throughout the year.

Other analysts identified price trends and shifting narratives as crucial drivers behind this reversal. Hank Huang, CEO of Kronos Research, commented that XRP’s retail surge in Q1 was propelled by legal clarity and attractive pricing for value-focused traders.

In Q2, Ethereum’s position improved as ecosystem developments and ETF speculations revived investor confidence and liquidity. Flows from Ethereum ETFs are said to be energizing the broader ecosystem.

On the other hand, the retail boost from Coinbase appears primarily price-driven. Huang statethat retail sentiment can fluctuate based on narratives, market trends, and macroeconomic cues, rather than consistent platform engagement.

Presto’s senior analyst Min Jung affirmed this, noting Ethereum’s underperformance in Q1 as its ETH/BTC ratios hit multi-year lows and retail interest faded. He observed that the retail-centric nature of Coinbase volumes tends to react to these dynamics.

At one point, Ethereum was viewed as “one of the most unloved assets in crypto,” according to Jung. Nonetheless, Ethereum started to regain momentum as digital asset treasuries gained traction, providing it with a new narrative and aiding its recovery from previously lagging prices and retail interest.