Analysts allowed Coinbase to leave the top 10 bitcoin exchanges by trading volume

By the end of July Coinbase may leave the list of the ten largest cryptocurrency platforms in terms of trading volume. Such a scenario was not excluded by analysts of Mizuho, writes Bloomberg.

The share of the largest U.S. bitcoin exchange in the top 30 fell from 5.3% in the first quarter to 3.6% at the end of the second quarter and to the current 2.9%, according to analysts’ calculations.

Mizuho warned that confirming their projections could make the company’s profitability trajectory “problematic.”

“We are concerned that the competitive nature of the industry may require further increases in marketing spending. Combined with weak trends in trading activity, this is likely to impact future profitability,” they explained.

Analysts attributed Coinbase’s vulnerability to its business model – the platform is “suffering” from increased competition in a declining market, while commission rates are perceived to be too high and unsustainable.

Recall that at the end of January-March 2022, the exchange received a net loss of $429.7 million. The figure was almost twice as high as analysts’ expectations.

Amid a weak start to the year and a downturn in the cryptocurrency market, Coinbase began to optimize costs.

Earlier, the company’s CEO Brian Armstrong announced that he was laying off about 18% of employees due to the onset of cryptozyma.

In July, the company announced further expansion into European markets.


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