GraniteShares 2x Short COIN Dai (CONI)

Key Updates

CONI has advanced +2.34% since the last report, rising from $49.52 to $50.68, with a +3.61% gain in the most recent session. This partially reverses the sharp -9.70% decline documented in the August 7 report. As an inverse leveraged product, CONI's rebound aligns directionally with Coinbase's (COIN) disappointing Q2 2026 results reported July 30, which triggered a 5%+ after-hours drop in COIN shares on a wider-than-expected net loss ($1.36/share vs. -$0.17 expected) and a third consecutive quarter of top- and bottom-line misses. However, the 5-day return remains negative (-7.06%), reflecting the offsetting impact of COIN's mid-July rally (+11% to $178 on July 21) driven by bullish options positioning ahead of the earnings release.

Current Trend

CONI's YTD decline of -25.71% understates the magnitude of COIN's YTD move (COIN was down ~30% YTD as of mid-July per Decrypt), illustrating the volatility decay characteristic of 2x leveraged inverse products, where whipsaw price action in the underlying erodes value even when the inverse thesis is directionally correct. The steep 6-month decline of -52.36% reflects sustained COIN strength through much of H1 2026. Near-term, CONI is trading within the $49.52 (August 7 low) to $54.84 (August 6 high) range established over the past week, with the current price near the midpoint following today's bounce off support.

Investment Thesis

CONI is a tactical instrument designed to profit from short-term declines in COIN, not a long-term directional holding, given compounding/decay effects inherent to daily-reset leveraged products. The bearish case for COIN rests on deteriorating fundamentals — declining transaction revenue, ETF outflows, and analyst estimate cuts — while the bullish case for COIN (bearish for CONI) is supported by technical signals (Bitcoin double-bottom), capitulation exhaustion, and speculative options flow anticipating a crypto recovery.

Thesis Status

The thesis received short-term reinforcement from the Q2 earnings miss, which validated concerns around volume declines and revenue softness flagged by William Blair and Piper Sandler in mid-July. However, the preceding 11% COIN rally on July 21 demonstrates that speculative positioning can drive sharp moves against the inverse thesis, and the net effect over the past week has been a modest CONI recovery insufficient to offset the prior week's steep decline. The thesis remains valid only as a short-duration tactical trade; the pattern of large, offsetting swings underscores elevated event risk around earnings and options-driven momentum.

Key Drivers

Key drivers since the prior report include: Coinbase's Q2 earnings miss with revenue declining to $1.2 billion from $1.5 billion year-over-year and a net loss of $359.5 million (CNBC, July 30); a sharp COIN rally to $178 on bullish options flow ahead of earnings, with call volume outpacing puts more than 4-to-1 (CNBC, July 21); and mid-July analyst revisions, including William Blair's estimate cuts alongside a maintained "outperform" rating and Piper Sandler's price target reduction to $155 (Decrypt, July 15).

Technical Analysis

CONI is trading at $50.68 after a +3.61% single-day advance, but remains down -7.06% over five days, reflecting continued volatility. The 1-month return is nearly flat (-1.76%), masking significant intraweek swings. Immediate support is at the $49.52 level (August 7 low); resistance is at $54.84 (August 6 high). A sustained move above $54.84 would signal renewed downside pressure on COIN, while a break below $49.52 would suggest COIN strength is reasserting.

Bull Case

• Coinbase posted a third consecutive quarter of revenue and EPS misses, with Q2 net loss of $359.5 million versus a $1.43 billion profit a year earlier (CNBC)
• Transaction revenue softened amid a range-bound bitcoin market and sustained ETF outflows (CNBC)
• William Blair cut 2026/2027 revenue estimates by 12-13% and adjusted EBITDA projections by 34% (Decrypt)
• Total trading volume forecast to decline approximately 44% in 2026 to $669 billion (Decrypt)
• Piper Sandler reduced its price target on COIN to $155 from $170, maintaining a "neutral" rating (Decrypt)

Bear Case

• COIN options activity showed strongly bullish positioning, with call purchases outpacing puts by more than 4-to-1 and over $80 million in call premium traded in a single session (CNBC)
• COIN shares surged approximately 11% to near $178, rebounding from support near $150 (CNBC)
• Technical analyst identified a completed "W" double-bottom pattern on Bitcoin's daily chart, signaling a potential trend change, with Glassnode data indicating long-term holder capitulation has begun to decline (Decrypt)
• William Blair maintained an "outperform" rating on COIN despite estimate cuts, expecting volume to rebound more than 32% in 2027 (Decrypt)
• CEO Brian Armstrong highlighted an all-time high market share in crypto trading as evidence of resilience across market cycles (CNBC)