It was pointed out that Coinbase, a global cryptocurrency exchange, continues to lose its market share.
According to CoinDesk on the 15th (local time), Dan Dolev, an analyst at Mizuho Financial Group, Japan’s largest financial institution, predicted that Coinbase’s market share would fall to 2.9% in July. In the meantime, the target stock price of Coinbase was lowered from $45 to $42.
Coinbase recorded 8-9% market share in November last year. Since then, it has averaged 5.3% in the first quarter of 2022. It also estimated the average transaction volume of Coinbase in July at about $1.2 billion. Binance’s July estimate is $11 billion.
“This trend has a negative impact on Coinbase shares,” said Dan Dolph. This is because as competition for exchanges intensifies, marketing expenditures must continue to increase, as well as burden commission rates. All of these situations are expected to combine to affect future profitability, he explained.
On the other hand, Christopher Brendler, an analyst at DA Davidson, a U.S. financial evaluation agency, predicted that Coinbase shares would survive in cryptocurrency winter.
According to Forbes, he said, “It is true that it will be difficult to make profits this year because much of our performance, including profits, is directly related to cryptocurrency transactions. But Coinbase has a lot of flexibility. Coinbase has experienced this crisis before. We will be able to overcome this winter.”
“The goal of Coinbase is to expand globally. Faced with new regulatory relations, banking, and financial systems, related costs can be high. Acquisition may be a reasonable choice to expand processes in the region smoothly and quickly, he explained.