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July 17, 2022

Coinbase Prominence Soars Amidst Everything

For centralized exchanges (CEXs), Coinbase looks to be suffering most from Crypto Winter. Cryptocurrency investors and traders may no longer be using the biggest American cryptocurrency exchange by trading volume. Many people in the industry believe it should be lower on the priority list.

By volume, Coinbase has slipped to 14th place on Mizuho Securities USA’s ranking of the top 10 biggest cryptocurrency exchanges. Considering the exchange was ranked 4th at the end of last year, this is troubling.

Coinbase’s contribution to the average market share of the top 30 centralized exchanges this month was only 2.9 percent, according to the data. As a comparison, in Q1 2022, this figure was 5.3% and in the second quarter of this year, it was 3.6%.

It’s easy to see how the Crypto Winter has impacted most exchanges’ trading volumes, but the situation at Coinbase is particularly troubling. Because of the industry’s fierce competition, Mizuho’s analysts are concerned that sales and marketing expenditures will have to rise in the future.

Coinbase stock, which trades on the NASDAQ under the symbol “COIN,” might be adversely affected by the current market conditions, according to the experts. With a share price of $53.42 at press time, the stock has dropped 75.94% in the last six months.

As early as April, news suggested that Coinbase, the leading American exchange, was fast losing market share. Coinbase accounted for 10% and 8% of worldwide crypto trading volume in March and April, respectively, among the leading crypto exchanges. This is a decrease from February’s figure of 11%.

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After only entering the US market recently, Singapore-based centralized crypto exchange Crypto.com was competing with Coinbase. Dan Dolev, a leading analyst at Mizuho, believes that the “business strategy” of Coinbase may be to blame for its recent troubles.

According to an email sent to staff on June 14, Coinbase was contemplating cutting its employment by 18 percent in the middle of the Crypto Winter. It seems that the economic boom that has lasted for more than a decade is about to come to an end. According to CEO Brian Armstrong, a recession might lead to another crypto winter that could endure for a lengthy duration.