Executive Summary
GraniteShares 2x Short COIN Dai (CONI) has declined 4.55% to $52.05 since the August 3 report, breaking below the prior intraday support of $52.66 and extending the post-earnings retracement from the July 31 peak of $58.04. The pullback reflects stabilization in Coinbase shares following the Q2 earnings-driven selloff, alongside lingering options-market optimism for a crypto recovery. The investment thesis remains anchored to Coinbase’s operating trajectory and crypto sentiment, with near-term downside in CONI constrained by COIN’s weak fundamental outlook but pressured by technical bottoming signals in Bitcoin.
Key Updates
Since the August 3 report, CONI has dropped from $54.53 to $52.05, surrendering the prior session’s rebound and invalidating the $52.66 support level. The move follows three consecutive days of decline from the post-earnings high of $58.04 recorded on July 31. This price action indicates that the initial bullish impulse for CONI—driven by Coinbase’s disappointing Q2 2026 results—has faded as the underlying equity finds a near-term floor and crypto-related assets stabilize.
Current Trend
CONI remains in a volatile intermediate-term downtrend, with a YTD decline of 23.70% and a 6-month decline of 52.96%. The 5-day performance of +20.37% reflects the sharp but short-lived post-earnings spike, while the 1-day decline of -4.55% confirms profit-taking and reversal momentum. Immediate support has shifted lower following the break of $52.66; resistance is now established at the August 3 high of $54.53 and the July 31 peak of $58.04.
Investment Thesis
The thesis for CONI is fundamentally tied to inverse exposure to Coinbase Global (COIN) and, by extension, the broader cryptocurrency cycle. As a -2x leveraged daily product, CONI benefits from deteriorating Coinbase fundamentals, declining crypto trading volumes, and bearish price action in Bitcoin. Conversely, it is vulnerable to crypto recoveries, bottoming technical patterns in Bitcoin, and mean-reversion in COIN following selloffs. The product exhibits significant volatility decay, meaning long-term directional exposure is eroded by choppy underlying price action.
Thesis Status
The thesis remains partially valid but is currently under pressure. Coinbase’s Q2 2026 earnings miss and widened net loss provide fundamental support for a bearish COIN view, which is constructive for CONI. However, the post-earnings price action in CONI suggests the market has already priced in much of this weakness. Furthermore, signals of a potential crypto bottom—including a Bitcoin W-pattern, peaking long-term holder capitulation, and heavily bullish options positioning in COIN—threaten to unwind CONI’s recent gains. The status is neutral-to-cautiously bearish for CONI.
Key Drivers
- Coinbase Q2 2026 earnings miss: The company reported a net loss of $359.5 million versus a profit of $1.43 billion in the prior-year period, with revenue falling to $1.2 billion from $1.5 billion and missing consensus. Transaction revenue softened amid a range-bound bitcoin market and sustained ETF outflows. Source
- Crypto recovery positioning: Options activity in Coinbase was strongly bullish in late July, with call purchases outpacing put purchases by more than four to one and over $80 million in call premium trading, tied to expectations for a crypto rebound. Source
- Volume and estimate cuts: William Blair expects Coinbase total trading volume to decline approximately 44% in 2026 before rebounding over 32% in 2027, while slashing 2026 and 2027 revenue estimates by 12% and 13% and adjusted EBITDA projections by 34%. Source
- Technical bottoming indicators: Analyst John Bollinger flagged a completed W double-bottom pattern on Bitcoin’s daily chart, while Glassnode data indicated long-term holder capitulation peaked and began to decline. Source
Technical Analysis
CONI has broken below the August 2–3 support cluster near $52.66, establishing $52.05 as a new near-term low. Resistance now sits at $54.53 (August 3 rebound high) and $58.04 (July 31 post-earnings peak). The failure to hold the $52.66 level after a brief rebound suggests weak buying conviction and opens the door for a test of lower levels last seen in late July. The 5-day rally of +20.37% has been fully retraced by the pullback from $58.04 to $52.05, indicating a bearish engulfing structure on the short-term timeframe.
Bull Case
- Coinbase posted a wider-than-expected Q2 2026 loss of $1.36 per share versus a 17 cent loss anticipated by analysts, with revenue declining to $1.2 billion from $1.5 billion year-over-year and marking the third straight quarter of misses on both top and bottom lines, underpinning fundamental weakness in the underlying equity. Source
- Transaction revenue softened to $599 million amid a range-bound bitcoin market and sustained ETF outflows, while net losses of $359.5 million compare unfavorably to $1.43 billion profit in the prior-year period, suggesting continued operating deterioration. Source
- William Blair projects Coinbase total trading volume to decline approximately 44% in 2026 to $669 billion, with 2026 and 2027 revenue estimates cut by 12% and 13% and adjusted EBITDA projections reduced by 34%, reflecting structurally lower activity levels. Source
- Piper Sandler maintains a neutral rating on Coinbase with a reduced price target of $155, below current trading levels, indicating limited near-term upside conviction among sell-side analysts. Source
- Coinbase shares have fallen nearly 30% year-to-date, underperforming the broader market and confirming a negative primary trend that historically supports inverse ETF positioning. Source
Bear Case
- Options markets displayed strongly bullish positioning in Coinbase, with call purchases outpacing put purchases by more than four to one and over $80 million in call premium, reflecting robust demand-side conviction for a near-term rebound. Source
- Technical analyst John Bollinger flagged a completed W double-bottom pattern on Bitcoin’s daily chart as confirmation of a trend change, which if validated would exert significant inverse pressure on CONI given the product’s -2x daily structure. Source
- Glassnode data indicated that long-term Bitcoin holder capitulation peaked two weeks ago and has begun to decline, a historical precursor to supply-constrained rallies that would lift correlated assets including COIN. Source
- Coinbase shares surged approximately 11% to trade near $178 on July 21, rebounding from a multi-tested support level near $150 that has held since early 2024, demonstrating durable institutional demand at lower valuations. Source
- CEO Brian Armstrong highlighted an all-time high market share in crypto trading as evidence the company can perform across market cycles, providing a narrative defense against sustained fundamental decay. Source