Both stocks report on Oct. 29, the day after the Fed, after a week in which spot bitcoin funds lost about $773 million in two days and bitcoin fell below $80,000 to its lowest level in more than a month.
The two most widely held crypto stocks report on the same day this week. The backdrop has turned since the quarter they are reporting on.
Coinbase and Strategy both publish third-quarter results on Thursday, Oct. 29, a day after the Federal Reserve's rate decision. Coinbase closed Friday at $164.45 and Strategy at $146.01.
The setup
Bitcoin traded near $80,400 early Sunday after falling as low as about $79,150 on Saturday, its weakest level in more than a month. That puts it below the average price at which investors in U.S. spot bitcoin ETFs bought in. Coinbase's own institutional research team estimates that cost basis at about $81,300, and said in a note on Oct. 23 that a sustained break below the $80,000 to $82,000 zone could expose $73,000 to $75,000.
The funds have been shedding money. They lost a net $635.6 million on Oct. 22, the largest daily outflow since June, and $137.9 million on Oct. 23, for about $773.5 million over two days. Spot ether ETFs lost about $1.2 billion in October through Oct. 22.
What each company will be asked
For Coinbase, the reported quarter ended before October's selling began. The more important discussion will be about the current quarter: trading activity in a weaker market and its partnerships in prediction markets, where short-dated bitcoin contracts have become one of the fastest-growing products.
For Strategy, the largest corporate holder of bitcoin, the price of the asset is the business. Attention this week has turned to the balance it must strike between buying more bitcoin and paying dividends on its preferred stock. Its most recent disclosed purchase was 267 bitcoin, reported on Oct. 19. Strategy shareholders also meet in a special meeting on Oct. 28, the day before results.
Two readings
The first is that both companies report into a market that has already absorbed a leverage flush, with bitcoin recovering above $80,000 within hours on Saturday and trading near that level through Sunday morning, which would make guidance and commentary more important than the backward-looking numbers.
The second is that ETF outflows and a price below the funds' average cost basis point to weaker demand heading into the fourth quarter, which would weigh on Coinbase's trading revenue and leave Strategy with less room to keep adding to its holdings.
What to watch
Monday's ETF flow data, any Strategy filing on Monday, the Fed's decision on Wednesday, both companies' results and calls on Thursday, and the expiry of bitcoin and ether options on Oct. 30.