GraniteShares 2x Short COIN Dai (CONI)

Key Updates

Executive Summary: CONI declined 8.96% since the last report, closing at $28.96 and erasing the entire multi-day bounce that had carried the ETF to $31.81 on August 26. The reversal breaks below the prior $29.69 support level (August 25 trough), establishing a fresh multi-month low and confirming that the structural downtrend in CONI — driven by sustained strength in the underlying Coinbase (COIN) share price — remains firmly intact despite Coinbase's disappointing Q2 results.

Current Trend

CONI remains in a deep, sustained downtrend across all timeframes: -8.13% (1d), -20.67% (5d), -33.02% (1m), -60.61% (6m), and -57.55% (YTD). The brief three-session rebound referenced in prior reports (trough $29.69 → peak $31.81) has fully reversed, with price now trading below the prior support at $28.96. This price action indicates the underlying COIN shares continue to grind higher, overriding short-term relief rallies in the inverse product.

Investment Thesis

CONI offers 2x daily inverse exposure to Coinbase and is structurally designed as a short-term tactical instrument rather than a buy-and-hold position, given daily compounding effects. The bearish thesis on COIN rests on deteriorating transaction revenue, crypto market volatility compression, and repeated earnings misses. However, sustained downward pressure on CONI signals that COIN's price trend has decoupled from near-term fundamental deterioration, weakening the near-term case for holding the inverse product.

Thesis Status

The bearish COIN thesis embedded in CONI has weakened further. Despite Coinbase's Q2 report showing a wider-than-expected loss, a third consecutive quarter of top- and bottom-line misses, and declining transaction revenue, COIN shares have continued to appreciate, dragging CONI to new lows. The failed bounce to $31.81 and subsequent breakdown below $29.69 confirm that market participants are pricing in factors beyond the reported earnings miss — potentially management's emphasis on record market share and growing subscription revenue. The thesis is not invalidated but requires COIN price weakness to materialize for CONI to re-rate higher; this has not occurred since the July 30 earnings release.

Key Drivers

Coinbase's Q2 2026 results (CNBC, July 30) revealed a net loss of $359.5 million versus a $1.43 billion profit a year earlier, with revenue falling to $1.2 billion from $1.5 billion, missing consensus. Despite this, COIN shares have trended higher into late August, the primary driver of CONI's renewed decline. Separately, the leveraged/inverse single-stock ETF landscape continues to expand, with new short products launched on SPCX (PR Newswire, Aug 27) and META, AXT, and COHR (PR Newswire, Aug 18), reflecting broader industry demand for tactical short vehicles, though these are not COIN-specific catalysts.

Technical Analysis

CONI has broken decisively below the $29.69 support established on August 25, confirming failure of the interim bounce that peaked at $31.81 (August 26). The prior support-turned-resistance zone of $29.69–$31.81 now caps any near-term recovery attempts. At $28.96, CONI trades at a fresh multi-month low, with the steep 1-day (-8.13%) and 5-day (-20.67%) declines indicating accelerating downside momentum rather than stabilization. No clear support level is evident below current price given the magnitude of the 6-month (-60.61%) and YTD (-57.55%) declines.

Bull Case

• Coinbase reported a Q2 loss of $1.36 per share versus a consensus estimate of a 17-cent loss, a substantial miss that could pressure COIN if repeated in future quarters — CNBC
• Revenue fell to $1.2 billion from $1.5 billion year-over-year, missing the $1.3 billion consensus and marking the third consecutive quarter of top- and bottom-line misses — CNBC
• Net loss of $359.5 million compares unfavorably to a $1.43 billion profit in the prior-year period, signaling deteriorating profitability — CNBC
• Transaction revenue softened amid a range-bound bitcoin market and sustained ETF outflows, a headwind for Coinbase's core business — CNBC
• Expanding issuance of short-oriented leveraged single-stock ETFs (Leverage Shares, Tradr) indicates rising investor demand for bearish tactical vehicles across the sector, a favorable backdrop for inverse products broadly — PR Newswire, PR Newswire

Bear Case

• CONI's sustained decline (-57.55% YTD, -60.61% over 6 months) demonstrates that COIN shares have remained resilient despite weak fundamentals, undermining the short thesis — CNBC
• Coinbase CEO Brian Armstrong highlighted an all-time high market share in crypto trading as evidence of the company's ability to perform across market cycles, a potential offsetting narrative to the earnings miss — CNBC
• Subscription revenue rose to $555 million and increased as a share of total business, indicating a degree of revenue diversification away from volatile transaction fees — CNBC
• The failed bounce from $29.69 to $31.81 and subsequent breakdown to $28.96 confirms renewed selling pressure on CONI, consistent with continued buying interest in the underlying COIN shares — CNBC
• As a 2x daily leveraged inverse product, CONI is structurally prone to value erosion from compounding effects during sustained directional moves in the underlying, a mechanical headwind independent of near-term fundamentals, occurring against a backdrop of rapidly proliferating leveraged ETF structures — PR Newswire