Coinbase trading volume fell 52% to $76 billion, marking the lowest quarter since its public listing.
Coinbase, the largest cryptocurrency exchange in the United States, has recorded a significant decrease in trading volumes as the crypto bear season drags on.
On October 11, Bloomberg reported that the lowest figures posted by the popular exchange last quarter may be the lowest in the past two years, citing analysis from CCData.
According to the report, the exchange's spot trading volume stood at $76 billion in Q3 2023, a 52 percent drop from last year.
The new figures put the exchange at its lowest level since its 2021 Nasdaq listing as investors' appetite for the crypto business has waned following more than a year of chaotic market policies and price falls.
Some observers predict a 10% drop in revenue as trading volumes remain key to generating revenue for the exchange. Transaction fees accounted for 54% of transaction revenues in Q2.
Despite the reduced activity, Coinbase shares rose more than 100% to $75 after the turmoil in 2022, after the price fell by 86%. Coinbase recorded a slight increase in market share even though spot volumes were very low.
Crypto market and institutional players
As digital assets are exposed to a new customer base, large corporates' interest in traditional finance, which creates fresh liquidity cycles, has led to significant growth in the market.
In the year Before the tragic events of 2022, these “big money” players shot the market higher than ever in 2021.
Coinbase is listed on Nasdaq in 2021 and its share price has risen to $350 as new investors buy plans for expansion, technical improvements and increased transaction volumes.
However, Q4 2022 saw a sharp decline in institutional investors in the market and led to a new bear cycle. The failure of Terra Networks and the collapse of FTX have been cited as a reason for the decline in institutional appetite around digital asset products in November 2022.
Regulation blocks Coinbase and Binance.
Coinbase is not alone in recording reduced transaction volumes, as market leader Binance suffered a similar fate after its market share declined for the seventh straight month.
HTX, DigiFinex and Bybit have reportedly taken up Binance's declining market share as the exchange faces regulatory scrutiny both inside and outside the US.
The strict regulations from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) against Binance, Coinbase and other platforms have increased uncertainty among market players.
In June, the SEC filed charges against Binance and Coinbase for allegedly linking trading services to unregistered securities, false registrations and user assets, among others.
Although both institutions promised to “vigorously defend” the allegations, the move has led to the attention of international regulators to reduce consumer confidence in the companies.
