Coinbase, a leading cryptocurrency exchange, experienced a more significant than expected decline in trading volumes in the United States in the third quarter, according to a research report published by investment bank Berenberg.
According to Berenberg Reports, the Decline in Coinbase's Transaction Volume Continues
The report cited data indicating a sequential decline in transaction volume of approximately 17% and a year-on-year decline of approximately 52%. Coinbase is scheduled to report third-quarter results on November 2.
Berenberg expressed concern about Coinbase's consumer uptake rate, stating that it is susceptible to compression due to increased competition in a crypto space experiencing lower volumes.
Analysts led by Mark Palmer emphasized that their concerns about Coinbase Global are not primarily due to concerns about the company's operational performance over the next few quarters.
Instead, it revolves around potential threats to its business from various regulatory actions and lawsuits in the US, as well as potential future challenges amid ongoing regulatory scrutiny of the crypto industry.
The report also noted that political challenges could reduce the impact of Coinbase's intense lobbying efforts. Recent headlines about Hamas' use of cryptocurrency seem likely to further complicate the issue of crypto's legal status.
*This is not investment advice.
