Coinbase Under Pressure as Crypto Market Volatility Cools
CryptoNewsTerminal Staff31 May, 2024
Coinbase Under Pressure as Crypto Market Volatility Cools
Coinbase Faces Challenges Amid Crypto Market Maturity Despite posting strong revenue in the first quarter, Coinbase, the leading US crypto exchange, faces headwinds. As the crypto market matures, volatility during bull runs has decreased, leading to reduced speculative trading and lower retail trading volume on Coinbase. In the first quarter, Coinbase's retail trading volume was significantly lower than in Q4 2021, when Bitcoin reached its previous all-time high. Even after the approval of a Bitcoin futures ETF in January, Coinbase's volumes have remained subdued. Amid this shift, average volatility in digital assets has dropped to 57% compared to 79% in 2021. This trend suggests that centralized exchanges like Coinbase may not experience the same level of fee revenue as in 2021's bull run. Despite these challenges, Coinbase remains optimistic. The company projects a 20-fold increase in net income this year, though the absolute level is expected to be lower than in 2021.
