Coinbase’s retail trading volumes dropped sharply in Q2, but beneath the surface, XRP continued to generate more consumer transaction revenue than Ethereum, extending a trend that began in the first quarter.
According to Coinbase’s Q2 shareholder letter, XRP made up 13% of consumer transaction revenue, narrowly ahead of Ethereum at 12%. That marked a shift from Q1, when the asset’s share was lower at 10%, while XRP briefly surged to 18%.
Overall transaction revenue declined 39% quarter-over-quarter to $764 million, with total net revenue falling short of analyst expectations at $1.5 billion versus a $1.59 billion consensus.
“In Q1, the SEC withdrew its appeal in the Ripple case, affirming that XRP’s secondary-market sales weren’t securities,” Juan Leon, research analyst at Bitwise Asset Management, told Decrypt. “That legal win sparked a rally in XRP’s price and retail interest in trading the token.”
XRP’s trading share on Coinbase climbed steadily from under 10% throughout 2024. The token’s Q1 jump coincided with a wave of value-seeking traders responding to the legal clarity.
But the rally proved short-lived. “Price momentum subsided in Q2,” Leon noted, with Ethereum regaining ground on the back of institutional flows and renewed ecosystem interest.
With fewer new regulatory or product catalysts, “retail traders shifted back toward Ethereum, where stablecoin activity and DeFi usage were accelerating,” Leon told Decrypt.
Leon cites the impact of the GENIUS Act’s passage into law and tokenization narratives as key factors to the Ethereum-favored rally, which he said “notched a 38% return in Q2 vs XRP's 11%.”
Still, Ethereum’s regained footing in Q2 wasn't driven by retail alone.
“Demand for Ethereum is on a surge as a result of inflows via ETFs and purchases from Ethereum treasury companies,” Leon said, explaining how this factor is driving a rally in Ethereum’s price. “We believe strong institutional demand for ETH will carry into the second half of the year.”
Other observers pointed to price action and shifting narratives as key drivers behind the reversal.
“XRP’s Q1 retail rise was driven by legal clarity and low-cost appeal, attracting value-focused traders,” Hank Huang, CEO of Kronos Research, told Decrypt.
Ethereum’s lag switched up by Q2 amid ecosystem developments and ETF anticipation, which Huang said “restored investor confidence and liquidity.”
Flows from Ethereum ETFs are “fueling broader ecosystem vitality,” he noted.
But the retail boost from Coinbase “remains price-driven,” and shows how retail sentiment could shift based on “narratives, market momentum, and macro cues rather than sustained platform engagement,” Huang explained.
Min Jung, senior analyst at Presto, echoed that view, adding that Ethereum's underperformance in Q1 as ETH/BTC ratios hit multi-year lows and retail interest waned.
The pattern, Jung said, reflects how the “retail-heavy nature” of Coinbase volumes often reacts to those factors.
Ethereum was “one of the most unloved assets in crypto” at the time, Jung told Decrypt.
Despite that, Ethereum began to “regain momentum” as digital asset treasuries gained traction, Jung said. That factor gave Ethereum “a fresh narrative,” helping it recover from lagging price and retail interest, he added.
