The horizon remains uncertain for Coinbase.
The Cryptocurrency exchange is still unable to get out of the bad patch that the cryptocurrency sector has been going through for a year.
The cryptocurrency market has lost nearly $2.1 trillion compared to its all-time high of $3 trillion reached in November 2021. The market is currently worth some $886 billion according to data firm CoinGecko.
Bitcoin, the most popular digital asset, has lost 75% of its value compared to its all-time high of $69,044.77 reached on November 10, 2021. BTC prices are currently trading around $17,233.76. The prices of the king of cryptocurrencies have relatively stabilized since the year 2023.
The biggest problem in the young blockchain-powered financial services industry is mistrust. The mistrust of the general public caused by a succession of scandals after the crypto craze of 2021.
Last May, sister tokens Luna and UST collapsed overnight causing billions of dollars in losses to retail investors and institutional investors. This disaster caused a credit crunch which forced the hedge fund Three Arrows Capital, or 3AC, to go into liquidation. Imminent crypto lenders like Voyager Digital and Celsius Network have filed for Chapter 11 bankruptcy.
This game of dominoes revealed the incestuous relationships and the interdependence between the actors of the crypto space. Customers of these platforms, who lost their savings, were often unaware that their money was often loaned to other firms.
In November, Sam Bankman-Fried’s crypto empire collapsed. This disaster was a real bombshell as the former trader was the institutional face of crypto. He had rescued many firms during the credit crunch and his FTX cryptocurrency exchange was valued at $32 billion last February.
The FTX rout has yet to reveal all of its casualties. The biggest, however, remains the confidence in the crypto industry which has completely collapsed. Retail investors have fled the sector, while institutional investors are much more cautious, especially since a recession is expected this year.