Coindesk recently stated that Coinbase, one of the major crypto exchanges, may suffer a drop in revenues during the crypto winter.
Coinbase just went public and resulted in a major increase in usage and revenue. However, aggregate exchange volumes have fallen by nearly 60% since the market top in May.
According to Coindesk’s estimates, trading activity on Coinbase is down 92 percent from its May peak, resulting in a very bizarre situation for Coinbase’s stock.
Long periods of inactivity have become the standard for cryptocurrency, as acceptance booms come and go like waves.
These large changes in engagement are terrible for the profitability of companies like Coinbase, not just because they make less money, but also because Wall Street is not well equipped to evaluate enterprises with that type of inherent peaks and troughs.
Some Wall Street analysts may be well-informed and kind enough to try to explain Coinbase’s unusual market position. Most, on the other hand, will not, and will examine the significant difference between the Q2 figures and the active publicly viewable volumes, which may be harmful to the company’s stock prices.
Coindesk also stated that Coinbase is still a smart investment. However, many investors have already decided they aren’t interested, which is why $COIN is down 31% since its original public listing.
However, if the present situations become more widely known on Wall Street, there is still room for it to fall lower, at least in the short term.