cryptocurrency

Could Coinbase Lose Its Position as a Major Crypto Player?

Could Coinbase Lose Its Position as The number one cryptocurrency exchange In the Western Hemisphere?

Coinbase is really hitting the bottom

Cryptocurrency exchange is often cited as one of the largest and most popular cryptocurrency trading companies in the world. It was also the first digital exchange to go public, having first joined the Nasdaq in April last year. Things were looking up for the exchange, and many felt the company would reach a peak unlike anything ever achieved in the crypto arena, but now things seem to be falling apart for Coinbase, and it may take some time. The foundation is fully recovered.

With the cryptocurrency crash affecting every cryptocurrency company, it is not surprising that Coinbase has been affected as much as its size. Shares of the company initially began selling for about $300 each in April when the company debuted on the stock market, although those shares have since fallen to the $50 range. The company is very attached to Bitcoin, and with the asset sinking into oblivion, it makes sense for a cryptocurrency exchange to follow suit.

Moreover, the cryptocurrency arena is losing value like never before. Since the beginning of the year, the crypto space has lost more than $2 trillion in value. Bitcoin – the world’s number one digital currency by market cap – has lost 70 percent of its value since hitting a new all-time high in November last year (the asset peaked at $68,000), and other assets like Ethereum have done the same.

Now, with all those coins crashing to the ground, Coinbase was forced to freeze hiring just a few months ago. 2022 was supposed to be the year Coinbase tripled its number of employees, although those plans did not materialize. This news was later followed by Coinbase claiming that it would lay off about 18 percent of its stock. This meant that not only were people hired, but many existing employees were on the verge of losing their jobs. The situation is getting uglier and uglier, and it seems that Coinbase is really feeling the effects.

Mizuho Securities explained in a recent interview:

We are concerned that the competitive nature of the industry is likely to require further increases in sales and marketing spending over time and could also affect coin take rates. All of this, along with fading volume trends, is likely to affect future profitability in our view.

Problems with the structure of the company?

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Their business model is experiencing structural problems, and they are experiencing a perfect storm of more competition in a declining market while taking rates are seen as too high and unsustainable.

Tags: bitcoin, coinbase, Mizuho

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