In recent years, Coinbase has built a reputation as the bread-and-butter of crypto trading platforms – commanding a high price for its services in exchange for institutional investment opportunities, a user-friendly, easy-to-use platform, And so on. ,
However, no big league investment can separate a company from that industry – and with crypto investors currently navigating choppy waters, it appears Coinbase is following suit.
A drop in trading volume equals a drop in revenue
While trading platforms such as Binance or Kraken rely heavily on staking to make profits and other methods of raising revenue, Coinbase is notorious for betting on transaction fees to keep its business running.
The downside of this model is that HODLers double down when times are tough – while many day traders become wary of market conditions, content to wait for better opportunities.
As a result, a predominantly bearish market for the first quarter of 2022 led to a disappointing quarterly report and an all-time low for Coinbase’s publicly traded stock coin.
Coinbase Prioritizes Consolidation Over Expansion
Overall, Coinbase is still in good shape. Despite ominous words in a recent 10-Q disclosure filing, Coinbase CEO Brian Armstrong said the company is not close to bankruptcy, and assured investors that their funds will be safe. Although the exchange seems fully capable of weathering the current storm, it has had to shelve some planned moves.
In a recent memo, Coinbase President and COO Emily Choi disclosed temporary changes to the firm’s recruitment policy and growth projections.
After stressing the importance of continued expansion for the company, Choi said that Coinbase will be slowing down its hiring efforts for the time being.
The current situation has prompted the Coinbase leadership to allocate resources to expanding “high-priority business goals,” despite plans to triple the company’s size in 2021.
come back strong
The memo ends on a more positive note, emphasizing the importance of quality onboarding to new employees. It also promises a great return in the short run, as evidenced by the illustrious track record of Coinbase leadership over the past 10 years.
“Big picture: We know this is a confusing time and a market downturn can sound scary. […], We plan for all market scenarios, and now we are starting to put some of those plans into practice. We are in a strong position – we have a solid balance sheet and we have gone through several market downturns before, and we have come out stronger every time.”
With a strong team of industry leaders already on board, Coinbase looks well on track to make a swift recovery once the dust has settled.
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