Coinbase’s Troubles: How a Trading Drop May Impact Their Bottom Line

Not many people are trading cryptocurrencies, and that’s not good news for Coinbase, a company that deals with cryptocurrencies like Bitcoin. In their recent report, a group of experts at Mizuho predicted some problems for Coinbase in the third quarter of the year.

These experts, led by Dan Dolev, think that Coinbase will make less money than they originally thought. They lowered their estimate by 7%, saying Coinbase will probably make around $609 million. Most other experts thought Coinbase would make about $682 million. The reason for this change is that not as many people are trading cryptocurrencies on Coinbase as expected. Mizuho experts believe that Coinbase had about $72 billion in trading from July to September, instead of the $88 billion they first thought. This means less money coming in for Coinbase.

The experts think that in the third quarter, fewer people will be trading cryptocurrencies, and this will hurt Coinbase’s income. When asked about this, a Coinbase spokesperson didn’t have anything to say. But in the past, Coinbase has said they want to make money from other parts of the cryptocurrency world, not just trading. The problem of fewer people trading cryptocurrencies isn’t just happening to Coinbase. It’s affecting all the places where people trade cryptocurrencies. This is even happening when the prices of cryptocurrencies like Bitcoin are going up. This year, Bitcoin’s price has gone up by 66%, reaching about $27,500.

Coinbase’s stock has also gone up a lot this year, more than doubling in value to about $72.50. One reason for Coinbase’s troubles is that regulators, the people who make rules, are getting stricter with cryptocurrencies. In June, the Securities and Exchange Commission, a government agency, took Coinbase to court, saying it was breaking the law by not following certain rules. Coinbase denies this.

But besides that, Coinbase is also seeing fewer regular people interested in trading cryptocurrencies. The prices of these digital tokens have gone up this year, but for the past few months, they’ve stayed at about the same level. People who help with cryptocurrency trading are also pulling back because they’re worried about the rules, and this means worse deals for regular traders.

Coinbase’s Chief Financial Officer, Alesia Haas, said that when cryptocurrency prices aren’t changing a lot, people just keep what they have and don’t trade.

In the long run, Haas and other Coinbase leaders want to make money from things in the cryptocurrency world that don’t depend on trading. For example, they’re trying to grow their staking business, which lets people make money by holding onto their tokens. They’ve also made more money this year from their partnership on the USDC stablecoin, which is linked to U.S. money and other assets that make interest.

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