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Here’s Who Is Profiting From Coinbase Decline


www.thecoinrepublic.com 15 July 2022 14:30, UTC
Reading time: ~2 m

  • Mizuho Securities USA data reveals that the power of Coinbase is diminishing. 
  • In terms of trading volume, Coinbase is currently at 14th position in terms of trading volume.
  • As Coinbase declines, Binance and FTX look to turn the situation in its favor.

The dominance of Coinbase is decreasing. A data published by Mizuho Securities USA, a subsidiary of a Japanese Investment Banking and Securities firm, reveals. Based in San-Francisco, crypto exchange is now at the 14th position in terms of trading volume. Last year, the prominent exchange was in 4th place. 

The market share of the exchange dropped by 5.5% from the first quarter of this year to 2.9%. The exchange is currently 80% down from its record peak. It had suffered a loss of $430 million to the shock of its shareholders. Coinbase earlier stated that it will fire 18% of its staff in June. Jim Canos, who predicted the crash of Enron in early 2000s, says he is bearish on Coinbase because of decreasing fine revenue. 

Coinbase is surrounded by competitors. Binance.US, the American subsidiary of a leading cryptocurrency giant, has recently added zero-fee trading to attract more customers. Hence, taking up the majority of the market share of the market leader. 

High trading fees was the main source of income for Coinbase. However, the exchange is losing its shine. 4% is the commission for the traders. Meanwhile its competitors are charging extremely low. For instance, FTX.US charges just 0.2% commission.  By depending on other streams of revenue, Coinbase competitors are providing extremely low fees.

As Coinbase flatters, Binance and FTX, the two largest crypto exchanges in the world by volume, are looking to take advantage of the situation. Coinbase is the third largest cryptocurrency globally.

The three crypto giants have proper established customer bases. There is always a fight among them for market share. According to its latest quarterly filing, retail investors consist of 95% of Coinbase’s transaction revenue.

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