Coinbase Is Definitely Falling Further and Further Behind

The cryptocurrency exchange is frequently mentioned in the same breath as some of the world's largest and most well-known cryptocurrency trading organizations. Additionally, it was the first first digital currency exchange to ever join a public stock exchange, making its debut on the Nasdaq back in April of the previous year. Things were looking up for the exchange, and many people believed that the company was going to reach a peak unlike anything that has ever been accomplished in the cryptocurrency industry. However, it appears that things are going from bad to worse for Coinbase, and it may be some time before the business is able to recover fully.

Given Coinbase's magnitude, it is not surprising that the company has been impacted to the extent that it has been by the recent cryptocurrency market fall, which is hurting every digital currency company in existence. When the company made its debut on the stock market in April, the stock shares of the company first began selling for about $300 apiece; however, the price of those shares has significantly decreased since then and is now somewhere in the range of $50. The company is so intertwined with bitcoin that, in light of the fact that the asset is falling further into obscurity, it is only natural to assume that the digital currency exchange will follow suit.

On top of that, the value of the cryptocurrency market is decreasing at a rate that it never has before. The value of the cryptocurrency market has dropped by more than two trillion dollars since the beginning of the year. Since reaching a new all-time high in November of last year (the asset peaked at $68,000), the value of Bitcoin, the world's most valuable digital currency based on market capitalization, has decreased by 70 percent. Other assets, such as Ethereum, have also experienced a similar decline in value.

Because of the recent decline in the value of cryptocurrencies, the cryptocurrency exchange Coinbase was obliged to implement a hiring freeze a few months ago. The year 2022 was expected to mark the year in which Coinbase will triple the number of employees, but these plans did not materialize. After this news broke, Coinbase issued a statement stating that it would be liquidating around 18 percent of its hoard. This meant that not only were people not going to get employed, but also a large number of those who already had work were in danger of being laid off. It seems as though Coinbase is truly starting to feel the impact of the scenario, which only kept getting worse and worse.

In a recent interview, Mizuho Securities provided the following explanation:

We are concerned that the highly competitive character of the market will eventually call for additional increases in the amount of money spent on sales and marketing, which may also have an impact on Coin's take rates. To top it off, volume trends have been relatively flat, which, in our opinion, is likely to have a negative impact on profitability heading forward.

Issues with the Organizational Structure of the Company?

They continued with the following:

Their company model is experiencing fundamental challenges as a result of the perfect storm of more competition in a falling market while simultaneously having take rates that are deemed to be too high and unsustainable.