oinbase">Coinbase, the largest U.S.-based cryptocurrency exchange, is expected to report its lowest quarterly trading volumes since before going public in early 2021 according to new data analyzed by Bloomberg.
Researcher CCData estimates oinbase">Coinbase’s spot trading volume plunged over 50% year-over-year in Q3 2022 to around $76 billion. This massive drop would bring volumes back down to Q3 2020 levels, prior to oinbase">Coinbase’s high-profile Nasdaq listing.
The decline highlights how crypto bear markets can heavily impact exchanges like oinbase">Coinbase that rely heavily on transaction fees for revenue. In Q2 2022, trading fees accounted for 54% of total revenue.
Analysts forecast another quarterly loss for oinbase">Coinbase when it reports earnings on Nov. 2. Mizuho Securities predicts a 10% revenue shortfall compared to expectations.
“Overall it looks like a challenging quarter,” said Owen Lau, analyst at Oppenheimer & Co.
In addition to bear market pressures, oinbase">Coinbase faces increasing regulatory scrutiny in the U.S. Its stock price (COIN) is down nearly 3% after-hours on the negative outlook.
oinbase">Coinbase isn’t alone in feeling the pinch of falling crypto volumes. Industry leader Binance has seen its daily spot volume halved to around $5 billion compared to November 2021.
Overall crypto market capitalization remains stuck around $1 trillion as the bear market enters its second year. Volatility and liquidity have declined across exchanges and assets.
While a test for crypto businesses, lower volumes could promote more sustainable growth for top exchanges like oinbase">Coinbase once markets recover. But the path back to former highs remains uncertain amid macroeconomic headwinds.
