Home Finance Crypto Winter Continues: Coinbase Reports 70% Drop in Consumer Transaction Volume

Crypto Winter Continues: Coinbase Reports 70% Drop in Consumer Transaction Volume

by Editorial Desk
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Is anyone still interested in cryptocurrencies? According to Coinbase, the world’s second-largest cryptocurrency exchange, the latest figures don’t bode well for crypto enthusiasts.

In their second-quarter earnings report, Coinbase revealed a significant decline in transaction volume. For consumers, the volume is down by a substantial 70% compared to the same period last year, while institutions experienced a 54% drop. The exchange attributes this downturn to various factors, including the overall decrease in the cryptocurrency market cap, lower average crypto prices, and minimal market volatility. As a result, the once lucrative opportunities to make significant profits from crypto investments have diminished.

Just a year ago, cryptocurrencies were seemingly everywhere in America, with their popularity reaching even the Super Bowl. However, things took a sharp turn when interest rates were raised by the Fed. Several major players in the crypto world, such as Three Arrows Capital, Celsius, and Voyager Digital, faced financial collapses. The high-profile implosion of FTX further exacerbated the situation, wiping out $2 trillion in market value.

The decline in the crypto market also affected Coinbase itself, leading to layoffs of 1,100 employees last summer and an additional 20% reduction in their workforce at the start of this year. While some have suggested that the “Crypto Winter” of 2022 is over, challenges still persist. Both Coinbase and Binance have been slapped with lawsuits from the US Securities and Exchange Commission in June, accusing them of offering unregistered securities to users.

Coinbase is trying to dismiss the lawsuit, but the controversy lingers, indicating that the “Crypto Winter” may not fully thaw anytime soon. So, it remains to be seen if the interest in cryptocurrencies will pick up again or if these challenges will continue to weigh them down.

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