Trading
volumes on Coinbase (NASDAQ: COIN) have fallen so sharply in the past quarter that they are now
below the levels seen in April 2021, when the exchange debuted on Nasdaq.
According to CCData, trader activity was valued at $76 billion, a decrease of 52% compared to the previous year’s third quarter.
The
exchange itself admits that transaction revenue accounts for more than half of
its total income. When investors remain inactive and trading volumes decline,
the platform’s profits also shrink considerably.
Although
Coinbase remains one of the larger exchanges in terms of reported volumes, it
has seen a significant drop in this key metric over the past year. This trend
also affects other platforms and is a result of lower cryptocurrency prices,
scandals, and high-profile exchange collapses.
Coinbase
achieved record volumes in May 2021 when cryptocurrency prices soared to
historic highs. In that single month, turnover reached $259 billion. However, it
was more than ten times lower in September, at $20
billion.
Coinbase volumes going down. Source: The Block
Analysts
are already more than certain that the company will report its seventh
consecutive declining quarter when it releases its report next month. For
example, Mizuho Securities believes that Q3 2023 revenue will be 10% lower than
official forecasts.
Despite
this, Coinbase’s stock has risen by nearly 120% this year. Some might say that the
shares have nowhere to fall, as they have lost over 80% of their value since
their debut in 2021. However, the chart shows that since May 2022, they have been
consolidating in the same volatility range and currently cost just under $80.
COIN shares consolidates. Source: Tradingview.com
Singapore and Bermuda, but
Not Europe
The San
Francisco-based cryptocurrency exchange has been strategically expanding its
global footprint. After a year of provisional approval, the company recently
secured a Major Payment Institution license from Singapore’s Monetary
Authority. This follows Coinbase abandoning its earlier plan to enter the
Singaporean market by acquiring the now-defunct Zipmex exchange in 2022.
In addition
to its Singaporean venture, Coinbase has received regulatory approval from
Bermuda’s financial authority, allowing it to offer perpetual futures trading
to qualified non-US customers. This new offering will be available on the
Coinbase Advanced platform in the near future.
However,
the company has put its European expansion on hold, specifically its plans to
acquire FTX Europe. Initially aimed at breaking into the European derivatives
market, the acquisition was suspended due to regulatory hurdles in the US. FTX
Europe, known for its significant share in the European trading volumes, was a
key target for Coinbase, as it holds nearly 75% of the global crypto
derivatives trading volume.
Trading
volumes on Coinbase (NASDAQ: COIN) have fallen so sharply in the past quarter that they are now
below the levels seen in April 2021, when the exchange debuted on Nasdaq.
According to CCData, trader activity was valued at $76 billion, a decrease of 52% compared to the previous year’s third quarter.
The
exchange itself admits that transaction revenue accounts for more than half of
its total income. When investors remain inactive and trading volumes decline,
the platform’s profits also shrink considerably.
Although
Coinbase remains one of the larger exchanges in terms of reported volumes, it
has seen a significant drop in this key metric over the past year. This trend
also affects other platforms and is a result of lower cryptocurrency prices,
scandals, and high-profile exchange collapses.
Coinbase
achieved record volumes in May 2021 when cryptocurrency prices soared to
historic highs. In that single month, turnover reached $259 billion. However, it
was more than ten times lower in September, at $20
billion.
Coinbase volumes going down. Source: The Block
Analysts
are already more than certain that the company will report its seventh
consecutive declining quarter when it releases its report next month. For
example, Mizuho Securities believes that Q3 2023 revenue will be 10% lower than
official forecasts.
Despite
this, Coinbase’s stock has risen by nearly 120% this year. Some might say that the
shares have nowhere to fall, as they have lost over 80% of their value since
their debut in 2021. However, the chart shows that since May 2022, they have been
consolidating in the same volatility range and currently cost just under $80.
COIN shares consolidates. Source: Tradingview.com
Singapore and Bermuda, but
Not Europe
The San
Francisco-based cryptocurrency exchange has been strategically expanding its
global footprint. After a year of provisional approval, the company recently
secured a Major Payment Institution license from Singapore’s Monetary
Authority. This follows Coinbase abandoning its earlier plan to enter the
Singaporean market by acquiring the now-defunct Zipmex exchange in 2022.
In addition
to its Singaporean venture, Coinbase has received regulatory approval from
Bermuda’s financial authority, allowing it to offer perpetual futures trading
to qualified non-US customers. This new offering will be available on the
Coinbase Advanced platform in the near future.
However,
the company has put its European expansion on hold, specifically its plans to
acquire FTX Europe. Initially aimed at breaking into the European derivatives
market, the acquisition was suspended due to regulatory hurdles in the US. FTX
Europe, known for its significant share in the European trading volumes, was a
key target for Coinbase, as it holds nearly 75% of the global crypto
derivatives trading volume.