Market share is being continuously squeezed.

Written by: Eric, Foresight News

Halfway through 2026, the crypto market hasn’t seen the rebound many expected. Bitcoin fell more than 30% in the first half of the year, once dropping below $60,000, and spot trading volume across the industry shrank by over 20% for two consecutive quarters. The much-anticipated CLARITY Act stalled in the Senate, forcing expectations of regulatory easing to be pushed back.

Coinbase embodied this chill with a first-half loss of over $750 million. If America’s leading crypto exchange is faring this way, second-tier exchanges are having an even harder time. According to recently released Q2 earnings reports, while some second-tier exchanges achieved revenue growth, their market share is being continuously compressed.

Gemini: Surviving on Founders’ Capital Infusions

Let’s start with the worst-performing one.

Gemini’s Q2 total revenue was $45.5 million, up 37% year-over-year (YoY), but exchange revenue fell 38% YoY to just $12.5 million. Spot trading volume shrank 66% from $11.3 billion in the same period last year to $3.8 billion. Revenue growth was entirely supported by side businesses like credit cards, staking, and OTC trading—credit card revenue alone was $16.2 million, up 231% YoY.

Gemini reported a Q2 net loss of $107.7 million, with a cumulative first-half loss of $217 million. Platform assets dropped from $18.2 billion a year ago to $8.4 billion. To make matters worse, its credit card business hit a snag: identity fraud incidents discovered in Q1 continued to unfold in Q2, leading to a $20.1 million provision for transaction losses in the quarter.

Contraction was swift and severe. On February 5, Gemini announced its withdrawal from the UK, EU, and Australian markets, effectively abandoning its years-old overseas footprint. It cut 40% of its workforce from the Q3 2025 peak, leaving 402 employees at the end of the quarter, and slashed marketing expenses by 45% YoY. In May, the Winklevoss brothers injected $100 million into the company through their fund at $14 per share, using their own money. While founder premium增持 sounds like a vote of confidence, the market read the signal as: the company can no longer raise money externally. This lifeline, paid in Bitcoin, then faced a drop in the cryptocurrency’s price, adding another impairment to the books—directly dragging Q2 adjusted EBITDA to -$74 million, worse than Q1.

Stock price is the most honest indicator. Gemini went public in September last year at $28, hitting a high of $45.89 on its first day. Now it has fallen more than 88% from that peak, with a 56% drop this year. Citigroup cut its target price to $4 in April, maintaining a sell rating.

Bullish: Financials Held Hostage by Bitcoin

Bullish’s situation is more complex. In addition to its exchange, the company owns CoinDesk media, index licensing, and the Consensus conference, giving it a relatively diversified revenue structure.

Bullish’s Q2 adjusted revenue was $92.6 million, up 62% YoY, with subscription and service revenue hitting a record $62.7 million—Morgan Stanley and Grayscale both use CoinDesk’s indices to launch products. Q2 adjusted net profit was $14.3 million, turning a YoY loss into a profit. Looking at these numbers alone, Bullish seems like the most respectable among second-tier players.

But the IFRS-based financial statements tell a different story. Q2 net loss was $280 million, mainly due to Bitcoin held in the company’s treasury—$245 million in fair value impairment was recorded in Q2 alone. Digital asset sales fell 44% YoY, indicating that institutional trading business is also shrinking.

CEO Tom Farley’s answer is a complete pivot. In May, Bullish announced the acquisition of securities registrar Equiniti at Consensus Miami, a deal worth about $4.2 billion, expected to close in early 2027. The goal is to complete the full chain of tokenized securities from issuance and listing to trading and tracking. On August 12, the company launched its own tokenized stock trading and obtained approval from Gibraltar’s regulatory authority.

It’s a hot story, but the capital market isn’t buying it right now. Bullish went public in August last year at $37, closing at $70 on its first day. Now its stock price is between $23 and $27, down more than 30% from the IPO price, with a roughly 35% drop this year. Zacks gave a sell rating after the earnings report.

eToro and Bakkt Have Half-Abandoned Crypto Trading Business

eToro delivered a solid performance: Q2 net profit was $229 million, up 9% YoY; adjusted EBITDA was $78 million, with a 34% margin; it had $1.2 billion in cash on hand and repurchased $87 million worth of shares.

But this financial trading platform, once known for crypto trading, is gradually returning to its roots. eToro’s crypto business contributed only $11 million in net trading revenue in Q2, including $2 million in impairment of the company’s crypto holdings, while traditional asset classes like stocks, commodities, and forex contributed $142 million, up 25% YoY. In fact, in Q1, eToro’s commodity trading accounted for 60% of commission revenue, with trading volume nearly quadrupling YoY.

The capital market has given it relatively fair treatment. eToro’s stock price is up about 17.6% this year, outperforming the S&P 500. TD Cowen cut its target price from $55 to $35 after the earnings report. In July, eToro announced the acquisition of broker TradeZero for up to $230 million, continuing its move toward becoming a U.S. retail broker.

eToro’s case shows that the way for second-tier players to survive is not to make their exchange better, but to stop being an exchange.

Bakkt sold its loyalty and trust businesses in 2025, going all-in on crypto infrastructure and stablecoin payments. It completed the acquisition of DTR in April, telling a B2B story of regulatory licenses plus stablecoin settlement.

Bakkt’s Q2 revenue was $170.1 million, a 70% YoY plummet. This $170.1 million in revenue corresponded to $169.3 million in costs, leaving almost zero gross profit. In the first half of the year, Bakkt handled only $410 million in total crypto trading volume, but management maintained its full-year guidance of $2.5 billion—meaning it needs to achieve five times the first-half volume in the second half.

If eToro provided the right answer, Bakkt is the exact opposite. Its planned new businesses have yet to take off, and its largest business—crypto trading—has almost hit rock bottom.

Leading Exchanges Continue to Grab Market Share

Coinbase’s first half was also tough. Q1 revenue was $1.41 billion, down 31% YoY, with a net loss of $394 million; Q2 revenue fell to $1.2 billion, with another $360 million loss, missing Wall Street expectations for three consecutive quarters. In May, Coinbase announced it would lay off 700 employees, accounting for 14% of its total workforce.

But two numbers stand out here. In Q1, Coinbase’s global crypto trading volume share hit a record high of 8.6%; in Q2, this figure rose to 10.3%, increasing for three consecutive quarters. As the total market shrinks but its share grows, this means the cost of contraction is disproportionately passed on to second-tier players. Gemini’s spot volume fell by 66%, Bullish’s digital asset sales dropped by 44%, but Coinbase’s trading revenue decline was significantly smaller than the industry average.

The concentration of resources toward leading players is becoming more obvious. Coinbase’s Q2 adjusted EBITDA was still $208 million, positive for 14 consecutive quarters; stablecoin revenue was $292 million in the quarter; its prediction market achieved an annualized revenue of $100 million within six months of launch. For the same new business, Gemini’s prediction market revenue in Q2 was $500,000. In a bear market, scale itself is a moat—liquidity, brand, and the ability to spread compliance costs all concentrate toward the top.

Conclusion

Putting the four earnings reports together, the survival picture of America’s second-tier crypto exchanges in the first half is clear. Trading volume is concentrating on Coinbase, their core revenue is collapsing at a rate of 40% to 70%; their转型 directions are surprisingly consistent—credit cards, prediction markets, stock trading, tokenized securities, stablecoin payments, doing everything except relying on spot trading fees.

eToro proves that diversification works; Bullish is betting on a tokenized future that won’t close until 2027; Gemini is retreating to the U.S. and surviving on founders’ capital; Bakkt is supporting the possibility of its stablecoin business with a 70% revenue drop. If the crypto market doesn’t recover in the second half, we may continue to see a sustained decline in various metrics.

For second-tier exchanges, the challenge of 2026 has never been growth—it’s survival.