✍️ 20 December, 2023 – 14:56 👤 Editor: Jakub Motyka
- Amid low revenues, layoffs, and market volatility, Coinbase is rumoured to be going bankrupt.
- The company denies the claims. Is Coinbase going bankrupt?
- The latest news about cryptos is on our Telegram channel.
Rumours are going around that the US cryptocurrency exchange Coinbase is going bankrupt since the company removed its Affiliate program in July and its advanced trading, Coinbase Pro. The company also merged USD and USDC order books, further causing speculations that the platforms could be insolvent.
In addition, Coinbase has been reporting losses since the crypto winter started. In the year’s second quarter, the American firm’s revenue dropped from $2 billion to $800 million. Its revenue also declined to $590 million in the third quarter – which Coinbase attributed to macroeconomic factors.
In an investor report, the major US crypto exchange wrote, “Transaction revenue was significantly impacted by stronger macroeconomic and crypto market headwinds, as well as trading volumes moving offshore”.
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Coupled with the shrinking revenues, Coinbase has recorded a reduction in the monthly transacting users (MTUs), aggravating the liquidation rumours. According to the exchange’s reports, MTU declined from 9 million to 8.5 million in the third quarter. A similar drop was reported in the second quarter, from a high of 9.2 million.
Coinbase Staff Layoff And The State of The Market
Coinbase’s poor performance has caused the NASDAQ-listed company to resort to layoffs. In June 2022, the firm’s CEO Brian Armstrong announced an 18% staff reduction – translating to about 1,100 lost jobs. In a statement, Armstrong mentioned the need to manage costs since the company grew too quickly during the bull cycle.
In addition, the executive talked about the possibility of a recession and its adverse effects in the digital asset space. “We appear to be entering a recession after a 10+ year economic boom. While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment”, Armstrong noted.
The collapse of major crypto projects and companies has increased the fears of Coinbase going under, including the demise of Terra Luna – a stablecoin algorithmic platform – causing market volatility. Notable companies such as Three Arrows Capital, Voyager Digital, and later Celsius Network collapsed. In another dramatic turn of events, Rival exchange FTX filed for bankruptcy in November, leading to the arrest of its CEO Sam-Bankman Fried.
More crypto articles:
- Who Is Really Behind Bitcoin (BTC)?
- Who Is Charles Hoskinson? The Story Of The Founder Of Cardano (ADA)
- Who Is The Creator Of Binance?
ES: Jared Kirui es un escritor financiero experimentado apasionado por todo lo relacionado con la tecnología blockchain. Anteriormente, estuvo en los mercados bursátiles y forex, brindando a los administradores de activos contenido de primer nivel. Con un don para producir artículos de alta calidad, comenzó a cubrir noticias crypto en 2021. Tiene una mente abierta, comercia por diversión y disfruta de los deportes.
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