In recent months, Coinbase has experienced a significant decline in market share, according to a report by research firm Kaiko. While Coinbase once dominated over half of the US crypto market share, its numbers have dropped to 41% in early September, down from 53% just a few months prior. On the other hand, Bullish has seen a notable increase in market share, almost doubling from 17% to 33% in the same period. This shift can be attributed to the different target audiences of the two exchanges, with Coinbase catering more towards retail investors and Bullish focusing on institutional clients and trading.
Meanwhile, the top US exchanges have significantly expanded their market share since 2021. Kaiko’s research shows that the three largest exchanges by volume now control nearly 90% of the market, up from 66% in April 2021. This growth has been at the expense of smaller exchanges, whose market share has shrunk from 34% to 11%. Several factors have contributed to this trend, including stricter regulations, reduced trading activity during bear markets, and the dominance of major players like Coinbase and Kraken in institutional crypto trading.
Coinbase’s declining market share coincides with British bank Barclays upgrading its stock rating from underweight to equal weight. Analyst Benjamin Budish highlighted Coinbase’s product expansion and improved economic prospects as reasons for the upgrade. He also mentioned the potential benefits of a more favorable regulatory environment for the exchange. However, uncertainty remains, especially regarding broader economic conditions and ongoing regulatory challenges. The unresolved Securities and Exchange Commission (SEC) lawsuit against Coinbase adds another layer of complexity to its operations.
Despite challenges and uncertainties, Coinbase’s stock saw a 5% increase in early trading today, according to TradingView data. However, the company’s year-to-date performance tells a different story, with its stock down 10%. Market observers are keeping a close eye on how the exchange navigates the evolving regulatory landscape and whether it can capitalize on potential opportunities presented by the changing market dynamics. With the upcoming US presidential election likely to impact the crypto industry, Coinbase’s future trajectory remains uncertain but full of possibilities.
