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 52% decrease
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 the recently concluded 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 nearly 120% this year. Some…
