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- Coinbase released its second quarter earnings for 2023 — and the report shows a crypto contraction.
- Consumer and institutional trading volume were both significantly down on the platform compared to last year.
- A prolonged Crypto Winter, plus an SEC lawsuit, could mean trouble for the industry.
Coinbase, the world's second-largest cryptocurrency exchange in terms of volume, released its second quarter earnings report on Thursday — and the results are less than favorable for crypto enthusiasts.
Transaction volume for consumers and institutions is down 70% and 54%, respectively, when compared to the second quarter of 2022.
The crypto exchange cited a decrease in crypto's overall market cap, with the average crypto prices falling, and low volatility in the market as reasons for the decline. The price of the most visible cryptocurrency, Bitcoin, has remained relatively stable since March, meaning the opportunity to make big returns has diminished.
It was just at last year's Super Bowl that cryptocurrencies and the companies facilitating their transactions seemed as ubiquitous in America as beer and pickup trucks.
But crypto's downward spiral began soon after, as the fed raised interest rates. Three crypto giants — hedge fund Three Arrows Capital, lender Celsius, and brokerage Voyager Digital — collapsed, and at the end of last year, the high-profile implosion of FTX decimated $2 trillion in market value last year, CNBC reported.
Coinbase began layoffs last summer, locking 1,100 employees out of their company email accounts in June, and has continued to make cuts this year, slashing another 20% of its employee base at the beginning of 2023.
While some have said that 2022's Crypto Winter is finally over, hurdles remain. In June, both Coinbase and Binance were hit with lawsuits from the US Securities and Exchange Commission, alleging that both exchanges have illegally offered unregistered securities to users.
Coinbase moved to dismiss the suit earlier this month, but with the controversy continuing, it doesn't look like the Crypto Winter will fully thaw anytime soon.