It seems that all is not well at Coinbase. Although company enjoys a lion’s share in US cryptocurrency market, a recent report by cryptoasset research firm Diar is suggesting otherwise. According to Diar’s report the company seems to be struggling with low user activity during current downturn, and the effect of this decline in activity is looking very pronounced and disturbing for the company.
Diar’s report, which relies on data sourced from CoinAPI, suggests that USD-denominated crypto trading has gone down significantly in 2018 despite crypto-to-crypto exchanges reporting stability or surge in their volumes. Coinbase, the most well-known and well-established cryptocurrency exchange in United States, seems to be hit the worst by this declining user activity as it seems to have lost 83% of its trade volume. According to Diar last month company seems to have processed trades of $3.9 billion only, which is almost 83% down from all time high of $21 billion in January.
However, Coinbase is not alone struggling with a decline in user activity. Bitstamp and Kraken, the other two major crypto exchanges operating in US, have also experienced significant decline in trades. Their declines have not been as pronounced as those of Coinbase though.
The report further suggests that Binance has also experienced some decline in its BTC, ETH, BCH and LTC volumes, but that decline is also not significant because in July company’s volume for these markets jumped 21%. Between February to June the volume for these markets at Binance had dropped to $9.4 billion from $17.5 billion, but in July it bounced back to $11.3 billion.
The figure among ciphers
However, an unexpected crypto exchange actually went through a very good phase during the same 6-months long period of Feb-July. OKEx, the third largest crypto exchange by daily trading volume, saw its volume for above mentioned 4 crypto markets surge almost 100 percent to $5.7 billion from $2.9 billion. This happened between June-July, which makes the rally even more astonishing because the volumes of Coinbase and Bitstamp declined even more during the same period.
However, the presence of Tether on OKEx and Binance explains this surge in their trading volumes. Both Coinbase and Bitstamp don’t support Tether while OKEx and Binance do. Since Tether has issued new tokens worth hundreds of millions of dollars during this June-July period, it explains why volumes might have surged on both these exchanges. Tether has regularly been accused of trying to manipulate the market with new token issues, and there’ve been direct links between prices of Bitcoin and Tether token issues. Same theory might’ve played out this time too.
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