Coinbase, one of the largest cryptocurrency exchanges by trading volumes, has been facing a turbulent year. During Q1 2022, Coinbase reported a net loss of $430 million, causing a notable plunge in COIN stocks. In May, the company announced it would lay off 18% of its staff because of the bearish market conditions.
Now, Coinbase is on the verge of losing a significant share of its dominance in the market. The recent data shows that Uniswap, one of the best DeFi exchanges, is almost surpassing Coinbase trading volume. Additionally, Binance has overtaken Coinbase in Bitcoin balances.
Uniswap about to overtake Coinbase’s trading volumes
A report by Kaiko said that since the beginning of the year, the market share of trading volumes for Uniswap against Coinbase has increased from 27% to 50%. The growing use of Uniswap has been attributed to a significant drop in Ethereum’s gas fees.
When the Ethereum gas fees are high, it deters people from using decentralized exchanges (DEXs) because of the high costs. During the DeFi summer of 2020, Ethereum gas fees climbed to over $100, making it financially unfeasible for investors to use them. However, with the gas fees dropping, DEXs have become increasingly popular.
Another factor that could also be causing the increasing trading volumes on Uniswap is the role that these platforms play in stablecoin swaps. Stablecoins have been under intense pressure following the collapse of TerraUSD (UST) and Tether (USDT) trading at a discount. Stablecoin pools now have the largest total value locked (TVL) in DEXs.
Binance overtakes Coinbase in Bitcoin balances
Binance has proved to be quite resilient despite the ongoing bear market. While most companies have been halting withdrawal services and even laying off employees, Binance has announced expanding its workforce by another 2000 employees and even launched zero-fee Bitcoin trading.
The Binance vs Coinbase debate has intensified with the former’s launch of zero-fee Bitcoin trading. Coinbase has been holding the largest amount of Bitcoin since 2014. However, since 2021, the exchange’s Bitcoin balances have been dropping, while Binance’s Bitcoin balances have been increasing.
On July 18, Binance finally flipped Coinbase. A graph from Glassnode analytics shows that the largest number of Bitcoin inflows into Binance started in January this year. There is no certainty that Coinbase will reclaim its former position as there have been speculations over the exchange’s financial position after recently halting its affiliate program.
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Source: Business 2 Community