GraniteShares 2x Short COIN Dai (CONI)

Key Updates

CONI has declined 5.05% from $54.53 to $51.78 since the August 3 report, extending the multi-day retracement from the July 31 post-earnings peak of $58.04. The move was catalyzed by Coinbase's Q2 2026 earnings miss — a wider-than-expected loss of $1.36 per share versus the $0.17 consensus — which initially drove CONI higher as an inverse leveraged instrument, but the subsequent 5-day COIN rebound of approximately 11% (per the July 21 CNBC article) has now reversed that gain. With CONI down 24.10% YTD and the 6-month return at -53.20%, the instrument continues to reflect the structural difficulty of holding a 2x short leveraged ETP through periods of crypto market volatility and mean reversion.

Current Trend

CONI's short-term price action remains under pressure. The 5-day return of +19.74% captures the earnings-driven spike, but the 1-day decline of -5.05% confirms that the post-earnings momentum has faded as COIN stabilizes and bullish options flow returns. The YTD return of -24.10% and the 6-month return of -53.20% underscore the persistent headwinds from leveraged decay and directional drift against the instrument's short thesis. Key observations include:

• CONI has now retraced from $58.04 (July 31 peak) to $51.78, a decline of approximately 10.8% in four sessions.
• The $150 level in COIN has been cited as a recurring support level since early 2024; COIN's rebound from below that level directly pressures CONI.
• The 5-day gain of +19.74% in CONI reflects the brief window of COIN weakness following the earnings release, now largely unwound.

Investment Thesis

CONI provides 2x inverse daily exposure to Coinbase (COIN). Its investment case rests on: (1) sustained deterioration in Coinbase's fundamental business — declining revenues, widening losses, and reduced transaction activity; (2) continued weakness in the broader crypto market suppressing COIN's share price; and (3) leveraged decay working in the instrument's favour during sustained, directional downtrends. The thesis is challenged when COIN experiences sharp, short-duration recoveries, as leveraged decay and daily rebalancing erode returns during volatile, mean-reverting markets.

Thesis Status

The fundamental backdrop for the short thesis has partially validated following Coinbase's Q2 2026 results: revenue declined to $1.2 billion from $1.5 billion year-over-year, marking the third consecutive quarter of top- and bottom-line misses, and the net loss widened to $359.5 million from a $1.43 billion profit in the prior-year period. However, the thesis is currently challenged by: (1) a sharp COIN rebound from the $150 support level, with shares recovering approximately 11% to ~$178; (2) strongly bullish options flow in COIN (calls outpacing puts 4:1); and (3) analyst commentary from William Blair maintaining an "outperform" rating despite estimate cuts, and technical signals (Bitcoin "W" double-bottom pattern) suggesting a potential trend reversal in the underlying crypto market. The net result is that while the fundamental deterioration supports the short thesis on a medium-term basis, near-term price action in COIN is working against CONI holders.

Key Drivers

The following factors are currently driving CONI's price action:

• Coinbase Q2 2026 Earnings Miss: Revenue of $1.2 billion missed the $1.3 billion consensus; EPS loss of $1.36 per share versus $0.17 expected; net loss of $359.5 million versus a $1.43 billion profit in Q2 2025. This is the third consecutive quarter of misses on both metrics. CNBC, July 30
• COIN Rebound and Bullish Options Flow: COIN surged ~11% to ~$178 from below $150, with call-to-put ratio exceeding 4:1 and over $80 million in call premium traded. This rebound directly compresses CONI's value. CNBC, July 21
• Analyst Estimate Cuts with Maintained Ratings: William Blair cut 2026/2027 revenue estimates by 12-13% and EBITDA by 34%, yet maintained "outperform." Piper Sandler reduced its price target to $155 but kept "neutral." Mixed signals limit downside conviction in COIN. Decrypt, July 15
• Bitcoin Technical Pattern: A completed "W" double-bottom pattern on Bitcoin's daily chart and declining long-term holder capitulation (per Glassnode data) suggest a potential crypto market bottom, which would be structurally bearish for CONI. Decrypt, July 15
• Transaction Revenue Softening: Transaction revenue fell to $599 million amid a range-bound bitcoin market and sustained ETF outflows, while subscription revenue of $555 million also missed expectations, indicating broad-based weakness in Coinbase's business model. CNBC, July 30

Technical Analysis

CONI is trading at $51.78, having retraced approximately 10.8% from the July 31 peak of $58.04. The instrument is now approaching the lower boundary of the recent trading range established between $52.66 (prior intraday low, per August 3 report) and $58.04. A breach below $51.78 would establish a new post-earnings low and signal continued erosion of the short-term bullish structure built on the Q2 earnings catalyst. The 5-day return of +19.74% versus the 1-day return of -5.05% illustrates the rapid mean reversion in progress. The YTD decline of -24.10% and the 6-month decline of -53.20% confirm that the dominant trend in CONI remains negative, consistent with the structural drag of leveraged decay in a volatile, non-trending underlying. Resistance is established at the $58.04 post-earnings peak; near-term support is being tested at $51.78, with the prior August 3 low of $52.66 now acting as overhead resistance.

Bull Case

• (1) Fundamental Deterioration in Coinbase's Core Business: Q2 2026 marked the third consecutive quarter of revenue and EPS misses, with net loss widening to $359.5 million from a $1.43 billion profit year-over-year. Sustained fundamental weakness is the primary catalyst for a sustained COIN decline and CONI appreciation. CNBC, July 30
• (2) Revenue Trajectory Deteriorating Across All Segments: Total revenue declined to $1.2 billion from $1.5 billion year-over-year; both transaction revenue ($599M) and subscription revenue ($555M) missed estimates, indicating no segment-specific offset to the business decline. CNBC, July 30
• (3) Significant Analyst Estimate Reductions: William Blair cut 2026 EBITDA projections by 34% and expects total trading volume to decline approximately 44% in 2026 to $669 billion, reflecting a structurally challenged revenue outlook for Coinbase in the near term. Decrypt, July 15
• (4) Sustained ETF Outflows Suppressing Transaction Revenue: The earnings release cited sustained ETF outflows and a range-bound bitcoin market as key drivers of softening transaction revenue, conditions which may persist if crypto market sentiment remains fragile. CNBC, July 30
• (5) $150 Support Level in COIN as a Potential Breakdown Zone: COIN dipped below $150 earlier in July before rebounding; a failure to sustain above this level on any renewed market weakness would be a significant bearish signal for COIN and a catalyst for CONI recovery. CNBC, July 21

Bear Case

• (1) Strongly Bullish Options Flow in COIN: Over 114,000 calls traded against nearly 50,000 puts, with call buying outpacing put buying by more than 4:1 and over $80 million in call premium tied to upside bets. Institutional and retail positioning is strongly directional against CONI. CNBC, July 21
• (2) Bitcoin Technical Bottom Signal: A completed "W" double-bottom pattern on Bitcoin's daily chart and declining long-term holder capitulation (Glassnode data) suggest the crypto market may have established a durable low, which would structurally support COIN and pressure CONI. Decrypt, July 15
• (3) Analyst Consensus Maintains Constructive Ratings on COIN: William Blair maintained "outperform" despite deep estimate cuts; Coinbase's CEO cited all-time high market share in crypto trading, suggesting the market views the earnings miss as cyclical rather than structural. Decrypt, July 15
• (4) Leveraged Decay and Daily Rebalancing Erosion: CONI's 6-month return of -53.20% and YTD return of -24.10% demonstrate the compounding cost of holding a 2x inverse ETP through volatile, non-trending markets. Even in a flat or mildly declining COIN environment, CONI can lose value due to structural decay.
• (5) COIN's Recovery from $150 Support Demonstrates Resilience: COIN's rebound of approximately 11% from below $150 — a level that has served as support multiple times since early 2024 — confirms that demand re-emerges at this level, limiting the downside in COIN and capping upside potential for CONI. CNBC, July 21