Analysts expect Coinbase to drop out of the top-10 Bitcoin exchanges by trading volume

Based on July results, Coinbase may leave the list of the ten largest cryptocurrency platforms by trading volume. Such a scenario was not ruled out by analysts at Mizuho, Bloomberg reports.

Since the start of July, Coinbase has fallen to 14th place in this metric. In 2021, it ranked fourth.

The share of the largest US Bitcoin exchange in the top-30 fell from 5.3% in the first quarter to 3.6% by the end of the second quarter, and to the current 2.9%, according to analysts.

Mizuho warned that confirming their forecasts could render the company’s profitability trajectory problematic.

We are concerned that the competitive nature of the industry may require further increases in marketing expenditure. Coupled with weak trading activity trends, this is likely to affect future profitability, — they explained.

Analysts attribute Coinbase’s vulnerability to its business model—the platform is suffering from intensified competition in a down market, while fee levels are seen as too high and unsustainable.

In January–March 2022, the exchange posted a net loss of $429.7 million. The figure was almost double analysts’ expectations.

Against a weak start to the year and the downturn in the crypto market, Coinbase began optimising costs.

Earlier, CEO Brian Armstrong announced layoffs of about 18% of staff amid the crypto winter.

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

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