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Etiket: Volume

Crypto.com Overtakes Coinbase to Dominate North American Crypto Trading, Data Shows

The crypto exchange’s volume has nearly quadrupled between mid-year and September.

Digital asset trading on Crypto.com has exploded this year, pushing the crypto exchange’s volumes in North America well ahead of Coinbase (COIN).

Crypto.com’s monthly spot trading volume soared to $134 billion in September from $34 billion in July, according to data from The Block. Overall trading volumes on North American crypto exchanges was $183 billion in September, in which Coinbase handled $46 billion.

Crypto.com first overtook Coinbase in July and continues to lead so far in October. So far this month, the exchange saw $112 billion trading volume out of the overall $173 billion traded on exchanges in the region, The Block data shows. Kraken, the third-largest exchange, way behind in October with just under $10 billion in trading activity.

A key reason for Crypto.com’s popularity could be the wide range of tokens on offer. It lists over 378, ranging from mainstays bitcoin (BTC) and ether (ETH) to memecoins, such as book of meme (BOME), to ecosystem tokens such as Jupiter’s JUP and deBridge. Coinbase and Kraken, in contrast, are more selective, offering fewer than 290 tokens each.

BTC and ETH trading dominate Crypto.com, accounting for more than 85% of all trading activity across Tether’s USDT stablecoin and U.S. dollar pairs, CoinGecko data shows.

Some 26% of the exchange’s web traffic comes from the U.S., Kaiko Research said earlier this month, with most users active during U.S. trading hours.

A Citigroup report earlier this month partly attributed this dominance to the crypto ETFs that have been extremely successful in 2024.

Matthew Sigel, head of digital assets research at VanEck, said in an X post in September that Crypto.com’s “average BTC trade size on Crypto dot com has 3x YTD” coinciding with Cboe Global Markets, a U.S.-based exchange, closing its spot crypto division.

“Liquidity has kept pace with trade volumes, suggesting market makers are also more active on the platform,” Sigel said at the time.

Meanwhile, the bump in volumes comes amid ongoing legal drama for Crypto.com. Earlier this month, the exchange filed suit against the U.S. Securities and Exchange Commission to “protect the future of the crypto industry in the U.S.,” shortly after it received a Wells notice from SEC staff.

Crypto.com CEO Kris Marszalek said the firm brought the case to limit the SEC’s “unauthorized overreach and unlawful rulemaking,” as CoinDesk reported.

Coinbase Revenue May be Hurt by Lower Trading Volumes, Regulatory Uncertainty, Analysts Say

The crypto exchange may also see lower staking revenue when it reports its Q3 earnings as ether underperformed in the quarter.

Wall Street analysts expect a further slowdown in spot trading volume for Coinbase (COIN) in the third quarter, partly triggered by a lack of catalysts for crypto and an uncertain regulatory environment heading into the presidential election.

The crypto exchange, when it reports its earnings post-market on Wednesday, is expected to experience a revenue decline of about 13% in the third quarter, to $1.26 billion from $1.45 billion in the last quarter, according to estimates on FactSet. Meanwhile, the earnings per share (EPS) are forecasted to be $0.46, up from $0.14 in the second quarter.

“Volumes continued to soften through the quarter and we shake out quite a bit below the Street, largely on weaker retail transaction revenues,” Barclays analyst Benjamin Buddish wrote in a note. He has an equal weight rating on the stock and raised its price target to $175 from $169 while cutting the EPS estimate to $1.05 from $1.62 in the third quarter.

The third-quarter slowdown in trading volume is not just Coinbase-specific but an industry-wide phenomenon. Data from The Block shows that roughly $3.3 trillion was traded on all crypto exchanges, compared to $3.92 trillion in the second quarter. Coinbase competitor Robinhood (HOOD) is also set to report third quarter earnings after-market on Wednesday.

Additionally, the data revealed that crypto exchange Crypto.com has been the most popular trading venue for investors in the North American region since July when it first overtook Coinbase as the exchange with the highest trading volume. One of the reasons why Coinbase might have fallen short in volume is due to Crypto.com’s offering of a wider range of tokens.

Analysts also believe that regulatory uncertainty due to the upcoming presidential election results was one of the main drivers behind lower trading volumes on U.S. exchanges. According to Oppenheimer, the spot volume outside of North America increased 61% from the previous quarter. “We believe lack of catalysts and US election overhang have negatively impacted bitcoin,” Oppenheimer analyst Owen Lau wrote. “International volume was a bright spot.”

The investment bank estimates that third-quarter revenue will be $1.29 billion and EPS will be $0.40. It has an outperform rating on Coinbase and a price target of $282 over the next 12 to 18 months.

Lower staking revenue

In addition to lower revenue from trading fees, which continues to be Coinbase’s main stream of income, J.P. Morgan’s Kenneth Worthington expects lower revenue from the exchange’s staking services. This is largely driven by ether (ETH) underperforming in the third quarter, down roughly 24% from Q2, according to the bank.

Ether, the second-largest cryptocurrency by market cap, has been trading in the rough range of $2,330 to $2760 since August, with the current price at $2624 as of press time. In the months from April to June, that range was much higher, at $3,503 to $3,368.

“Ether [has] particularly underperformed [during the quarter] despite seeing the launch of its spot ether ETPs intra-quarter,” Worthington wrote. “We see this market cap contraction particularly weighing on Coinbase’s staking revenue in 3Q and subscriptions and services revenue overall.”

Subscription and services revenue was one of the bright spots in the second quarter, growing 17% from Q1. The main catalysts for the uptick were higher average USDC on-platform balances and USDC market capitalization.

J.P. Morgan, which rates the stock neutral, raised its price target to $196 from $180. However, it sees EPS landing anywhere between $0.42 and $0.54 for the third quarter.

Shares of the exchange are up nearly 30% year-to-date, but they are currently 21% down from their peak of $279.71 in March. As of press time, the stock was trading at $221.97.