As Coinbase presents a Q1 rapport with numbers far below what was expected they see their stock fall 25%. Coinbase is also reporting that the trading volume projected for Q2 is expected to be even lower then for Q1. This is probably an attempt from them to stave of expectations trying to save as much of their stock value as possible.
But Coinbase also have upcoming projects such as their NFT marketplace and they have also started to make inroads into the DeFi space. So they are probably looking to broaden their income stream. As it is currently composed of around 90% trading fees. Meaning they are at the mercy of the market.
Along with these Q1 rapport there was also a clarification coming out. This was with regards in the event of a bankruptcy. In the event of a bankruptcy a crypto exchange would have legal claims of their customers crypto. To be more precise: US Securities and Exchange Commission (SEC) declared that Coinbase would have the right to hold crypto assets of its retail users as property of the bankruptcy estate, should the company file for bankruptcy.
Or you could say it in a much more simpler way:
Not your Keys, Not your Coins.
I assume this also will start up the debate of DEX vs CEX, or if you will Centralized vs Decentralized. Where Coinbase is representing the Centralized camp.
Personally I do not thing this is a likely scenario. That Coinbase will file for bankruptcy. At least not in the near future. And especially not as Coinbase has partnered with some of the major financial institutions in the US. As they see and use Coinbase as their entry way into the crypto marketplace. And Coinbase is also looking to expand they market from being a primary US based company to become a global actor.
But what are your thoughts on the subject, do you think Coinbase will fold in 2022? Do you prefer a DEX over a CEX, or do you prefer a CEX over a DEX? Let me know in the comments down below.
Until the next time, as always take care and have a great day. And if you want to support me and the content I make pleas consider giving me a follow and reading my other posts in my two blogs. You can find them here and here.
See you on the interwebs!
Picture provided by: https://www.coinbase.com/press