Coinbase, one of the leading cryptocurrency exchanges in the world, has been having trouble competing with its rivals amidst a bear market.
Coinbase, one of the leading cryptocurrency exchanges in the world, has been having trouble competing with its rivals amidst a bear market. The company’s stock price has fallen by more than 40% since January. This comes after Coinbase had previously announced plans to offer institutional investors access to digital currencies and derivatives spot trading services.
However, since then, Coinbase has been forced to delay its institutional offerings due to government regulations in New York and other parts of the U.S.. The company also recently announced that it would stop supporting Wirex cards for customers who are based outside of Europe due to concerns about potential regulatory issues from regulators like MAS (Monetary Authority of Singapore) or HMRC (Her Majesty’s Revenue & Customs).
This has led to a drop in trading volume for the exchange, which has hit an all-time low.
As you might expect, the drop in trading volume has also led to a drop in revenue for Coinbase—the exchange’s Q1 losses were $520 million. This is a huge drop from Q4, when it had $138 million in earnings.
The decline of cryptocurrency trading volumes across the board has been a major contributor to this sharp decline in revenue. In fact, some high profile exchanges are experiencing even more drastic decreases than Coinbase has seen lately: Binance experienced an 86% fall and Bitfinex saw its revenues fall by 94%. While all signs point towards these drops having something to do with regulation and high costs associated with complying with new laws (which most exchanges are still struggling with), no one knows exactly what’s caused these declines yet
Cryptocurrency trading volume is at its lowest point in four months
Coinbase, the largest cryptocurrency exchange in the U.S., is struggling to retain its customers. The company’s trading volume has declined by a whopping 70% since December 2018, when Bitcoin was at its peak and the entire ecosystem of cryptocurrency was booming. At that time, Coinbase boasted more than $50 billion in daily transactions and a market cap of roughly $1 billion.
Today, however, it hardly seems to be a force within this space anymore. Its trading volume has fallen from an average of over 5 million Bitcoins per day (BTC) in January 2019 to just 1 million BTC today—and this represents not only an enormous drop from then but also a four-month low point for Coinbase’s performance as an exchange since May 2018!
Coinbase’s prospects are not looking good right now.
Coinbase’s prospects are not looking good right now. The popular cryptocurrency exchange has suffered its worst trading day in years, with daily volume for the company dropping to a new low.
The company’s current situation is not ideal. While its competitors have been experiencing record profits, Coinbase has been slowly losing ground to its rivals since July 2018. This past week was particularly bad for the company, which saw its daily trading volume drop from $48.58 billion on Thursday to $26 billion on Friday and even lower at $23 billion on Saturday and Sunday before rebounding slightly over the weekend again at about $25 billion per day in total transactions conducted through Coinbase’s platform (this does not include other exchanges like Binance).
This means that only about 5% percent of bitcoin trades globally are happening through one site: CoinBase! Even though this number represents double what we’ve seen in previous weeks–and triple what we saw just two months ago–it’s still pretty dismal given how much hype surrounded crypto a few years ago when everyone wanted their share of fortune from Bitcoin or Ether investments back then.”