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Coinbase, one of the early crypto start ups is facing a dip in crypto trading volume. Notably, since the month of February, the exchange platform has taken another step back in volume after centralized exchange saw a further decline in total liquidity poured into the platform. Last month was a difficult one for the centralized and decentralized exchanges. According to data from BeInCrypto Research, the one of the first crypto firms that went public last year noted approximately $93 billion in trading volume in the second month of the year.
Trading volume on Coinbase is decreasing
The decrease in volume over the last two months could have detrimental effects on Coinbase. Notably, the effect began since the platform competes with centralized exchanges like Binance, Mandala Exchange, OKX, Hotcoin Global, CoinFLEX, BitMart, IndoEx, Upbit, Deepcoin, MEXC, and HitBTC, among others.
However, unlike other platforms that saw an increase year-on-year took a massive hit in its annual performance, Coinbase saw a monthly decrease of 27%. The total volume recorded for February 2021 was approximately $128 billion.
Besides, we have also observed that the platform was unable to live up to its milestones that it accomplished in the second quarter and late 2021.
Overall, by the end of the last month, the total volume of Coinbase was 63% and 36% below the volumes it witnessed between May and December 2021 respectively.
What caused Coinbase’s volume decline?
The decline in terms of trading volume was noted due to several factors. Among the factors, the total number of markets supported, and the markets traded during the periods are certainly primary ones.
Notably, for being a centralized platform, Coinbase has witnessed notable criticism by numerous experts as supporting a relatively smaller number of coins when compared to competing platforms. Besides, the platform does not support many pairs which als affected the course of trading patterns on the exchange during a bearish market.
The overall outlook sums up why there is a consistent decline in the volume of trading over the past couple of months. The trading volume as the time of writing stands near $33 billion.
