Coinbase Global is falling out of the coveted list of the world’s top 10 digital-asset exchanges by volume as the markets battle a cryptocurrency winter.
The latest data for this month so far shows the company is now the 14th largest exchange, down from the fourth-biggest in late 2021, according to Mizuho Securities.
The main exchange for digital tokens in the US only had a 2.9 per cent average market share among the top 30 exchanges globally so far this month, Mizuho said. That’s down from 3.6 per cent average in the second quarter of this year and 5.3 per cent in the first quarter, the report said.
It is the latest sign that Coinbase’s profit trajectory looks problematic, according to Mizuho.
“We worry that the competitive nature of the industry is likely to require further increases in sales and marketing spend over time, and can also weigh on Coin’s take rates,” Mizuho analysts said in the report. “All this, coupled with subdued volume trends, is likely to weigh on profitability moving forward, in our view.”
Coinbase didn’t immediately return a request for comment.
As cryptocurrencies prices collapsed in the last eight months, erasing about $2 trillion in market value, the trading volumes of most large exchanges dwindled as retail traders remained on the sidelines.
Coinbase is suffering “because their business model is seeing structural issues: suffering from a perfect storm of more competition in a declining market while take rates are perceived to be too high and unsustainable”, Mizuho analyst Dan Dolev said in an email.
Coinbase said in June that it would lay off 18 per cent of staff after a streak of aggressive hiring. Other exchanges, such as Gemini Trust, have laid off workers as well.
War
Director: Siddharth Anand
Cast: Hrithik Roshan, Tiger Shroff, Ashutosh Rana, Vaani Kapoor
Rating: Two out of five stars
Why your domicile status is important
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About Krews
Founder: Ahmed Al Qubaisi
Based: Abu Dhabi
Founded: January 2019
Number of employees: 10
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Building boom turning to bust as Turkey's economy slows
Deep in a provincial region of northwestern Turkey, it looks like a mirage - hundreds of luxury houses built in neat rows, their pointed towers somewhere between French chateau and Disney castle.
Meant to provide luxurious accommodations for foreign buyers, the houses are however standing empty in what is anything but a fairytale for their investors.
The ambitious development has been hit by regional turmoil as well as the slump in the Turkish construction industry - a key sector - as the country's economy heads towards what could be a hard landing in an intensifying downturn.
After a long period of solid growth, Turkey's economy contracted 1.1 per cent in the third quarter, and many economists expect it will enter into recession this year.
The country has been hit by high inflation and a currency crisis in August. The lira lost 28 per cent of its value against the dollar in 2018 and markets are still unconvinced by the readiness of the government under President Recep Tayyip Erdogan to tackle underlying economic issues.
The villas close to the town centre of Mudurnu in the Bolu region are intended to resemble European architecture and are part of the Sarot Group's Burj Al Babas project.
But the development of 732 villas and a shopping centre - which began in 2014 - is now in limbo as Sarot Group has sought bankruptcy protection.
It is one of hundreds of Turkish companies that have done so as they seek cover from creditors and to restructure their debts.
