Key Updates
GraniteShares 2x Short COIN Dai (CONI) has rebounded 2.66% to $51.57 from the August 5 low of $50.23, though it remains below the broken support zone of $51.78–$52.05. The modest bounce follows Coinbase’s disappointing Q2 2026 earnings report, which posted a wider-than-expected loss and declining revenue, providing a near-term tailwind for the short ETF. The investment thesis remains intact but fragile, as the broader crypto recovery narrative and bullish options positioning in COIN continue to pose downside risks to CONI.
Current Trend
CONI exhibits a mixed near-term picture against a deeply negative medium-term backdrop. Year-to-date, the ETF is down 24.41%, reflecting sustained pressure from Coinbase’s operational resilience and crypto market rebounds. The 6-month decline of 63.26% underscores the severity of the erosion in this leveraged short product. However, recent performance has turned positive: the fund is up 12.00% over one month, 9.25% over five days, and 2.66% since the last report, indicating a tentative short-term recovery aligned with Coinbase’s post-earnings weakness.
Investment Thesis
CONI is a leveraged inverse vehicle designed to deliver twice the daily inverse return of Coinbase (COIN) stock. The thesis for holding CONI rests on expectations of deteriorating crypto trading volumes, compressed transaction revenue at Coinbase, and potential further downside in COIN shares amid a challenging operating environment. Conversely, the bear case for CONI stems from expectations of a crypto market bottom, rebounding Bitcoin prices, improving investor sentiment, and Coinbase’s diversification into subscription services and prediction markets. The product also faces structural decay risk inherent in daily rebalanced leveraged ETFs over holding periods longer than one day.
Thesis Status
The thesis is partially validated but under pressure. Coinbase’s Q2 2026 earnings miss—reporting a $1.36 per share loss versus $0.17 expected, and revenue declining to $1.2 billion from $1.5 billion year-over-year—supports the bearish COIN view and has driven CONI off its recent lows. However, the post-earnings retracement from the July 31 peak of $58.04 to the August 5 trough of $50.23 demonstrates that bullish sentiment and dip-buying in crypto-related equities remain active. The failure to reclaim the $51.78–$52.05 support zone suggests the bounce lacks conviction, and the medium-term downtrend since early 2026 remains dominant.
Key Drivers
Primary catalysts influencing CONI include:
- Coinbase Q2 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 transaction revenue softening amid range-bound Bitcoin and ETF outflows. CEO Brian Armstrong highlighted record crypto trading market share. Source: CNBC
- Bullish Options Positioning: Traders have accumulated heavily bullish positions in COIN, with over 114,000 calls trading against 50,000 puts and call purchases outpacing puts by more than four to one. The most active contract was the 190-strike call. Source: CNBC
- Analyst Sentiment and Bitcoin Technicals: William Blair maintained an "outperform" rating on COIN despite slashing 2026 revenue estimates by 12% and adjusted EBITDA by 34%, forecasting a 32% rebound in trading volume in 2027. Technical analyst John Bollinger identified a completed "W" double-bottom pattern in Bitcoin, while Glassnode data showed long-term holder capitulation peaking. Source: Decrypt
Technical Analysis
CONI is attempting to stabilize after breaking below the $51.78–$52.05 support zone on August 4–5. The current price of $51.57 sits just beneath the lower bound of that former support, which now acts as immediate resistance. The 2.66% bounce from the $50.23 low is modest and has yet to recover the breakdown level. The July 31 post-earnings peak of $58.04 represents the near-term ceiling. A sustained move above $52.05 is required to challenge the downtrend, while failure to hold $50.00 risks extension of the 6-month downtrend. Volume confirmation on any further advance will be critical to assess whether this is a dead-cat bounce or the start of a more durable retracement higher.
Bull Case
- Coinbase reported a Q2 2026 loss of $1.36 per share, significantly worse than the $0.17 loss expected by analysts, with revenue falling to $1.2 billion from $1.5 billion year-over-year. Source: CNBC
- The company swung to a net loss of $359.5 million from a profit of $1.43 billion in the prior-year period, underscoring severe margin compression and profitability deterioration. Source: CNBC
- Transaction revenue softened to $599 million amid a range-bound Bitcoin market and sustained ETF outflows, indicating core trading activity remains depressed. Source: CNBC
- William Blair slashed 2026 and 2027 revenue estimates for Coinbase by 12% and 13%, respectively, and cut adjusted EBITDA projections by 34%, reflecting fundamental downward revisions. Source: Decrypt
- The firm expects Coinbase’s total trading volume to decline approximately 44% in 2026 to $669 billion before any potential rebound, validating the weak near-term operating environment. Source: Decrypt
Bear Case
- Options activity in Coinbase was strongly bullish, with over 114,000 calls trading against nearly 50,000 puts and call purchases outpacing put purchases by more than four to one, signaling robust investor optimism. Source: CNBC
- Technical analyst John Bollinger flagged a completed "W" double-bottom pattern on Bitcoin’s daily chart as confirmation of a trend change, which would lift crypto-correlated equities including COIN. Source: Decrypt
- Glassnode data indicated that long-term Bitcoin holder capitulation peaked two weeks ago and has begun to decline, suggesting selling pressure is exhausting and a market bottom is forming. Source: Decrypt
- William Blair maintained an "outperform" rating on Coinbase and expects total trading volume to rebound more than 32% in 2027, implying operational recovery and limiting sustained downside in COIN. Source: Decrypt
- CEO Brian Armstrong highlighted an all-time high market share in crypto trading, suggesting Coinbase’s competitive positioning remains strong and the company can perform across market cycles. Source: CNBC