Crypto’s Falling Prices See Coinbase’s Popularity Decline

Francisco Memoria
  • Coinbase's traffic has been declining since December, when most cryptocurrencies hit their all-time highs.
  • The company's CEO seems to be above the decline, as he claims to use the down cycles to "build a strong foundation," to later on thrive.

Prominent San Francisco-based cryptocurrency exchange Coinbase is reportedly seeing its popularity drop due to the price decline most cryptocurrencies have been enduring. The company’s download rankings have fallen to their lowest among US finance apps since April 2017.

According to Quartz, Coinbase’s app was the top finance app in the US back in December - when most cryptocurrencies hit their all-time highs. Bitcoin, the flagship cryptocurrency, came close to $20,000 at the time, but has since declined to about $6,300 at press time, according to CryptoCompare data.

Coinbase, which recently added support for GBP deposits and withdrawals, saw its app fall to 40th place in the June download rankings, seemingly affected by the market’s bearish trend. As Quartz points out, users may still access it via its website, which according to SimilarWeb also saw traffic plunge.

Per the website’s statistics, Coinbase’s traffic plunged from 126 million monthly visits in January, to about 28 million in June.

traffic overview Coinbase.png

The company has been building services that may affect its overall traffic in the past few months. After saying goodbye to its Global Digital Asset Exchange (GDAX) and rebranding it into Coinbase Pro, which launched to little fanfare, the San Francisco-based startup launched the Coinbase Index Fund, which gives US accredited investors exposure to digital assets listed on Coinbase Pro.

Coinbase is reportedly valued at $8 billion, making it one of the most valuable companies in the cryptosphere behind Bitmain, which was valued at $12 billion in a funding round. It makes money by charging transaction fees and made over $1 billion in revenue last year, Quartz repots.

The decline hasn’t exclusively been affecting Coinbase, however, as most cryptocurrency exchanges have seen traffic decline on their websites. A few exceptions include leading crypto exchange Binance, and controversial exchange FCoin, which launched a new revenue model called “trans-fee mining.”

Coinbase’s co-founder and chief executive officer Brian Armstrong has last month revealed he isn’t affected by the bear market, and presumably by declining traffic, as it uses the “down cycles to build a strong foundation,” so as to thrive when the bullish run comes.

Coinbase’s problems may not just be related to the bear market, however, as various companies have launched competing platforms. Square’s Cash app has recently started letting users buy and sell bitcoin without charging fees, and made $200,000. Stock trading app Robinhood has also launched Robinhood Crypto, allowing its millions of users to buy and sell cryptocurrencies without dealing with fees.

Zuckerberg Says Libra Can Boost Facebook's Ad Revenue, China Sees It as a Much Bigger Deal

Facebook CEO Mark Zuckerberg has, during a shareholder meeting, explained how the Libra cryptocurrency project will help the social media giant make money. China, on the other hand, published a book addressing the challenges Libra poses, arguing it could become the future of world currency.

In a transcript posted by Thomson Reuters, we can read Zuckerberg replied to a question asked by a shareholder on how Facebook will be making money off of the Libra cryptocurrency project. Zuckerberg responded by going into Libra’s potential impact on e-commerce on Facebook, and its potential impact on advertising revenue.

According to the social media giant’s CEO, Facebook does not charge a set price for ads and instead works with a bidding system, where every business trying to advertise will bid to compete for ad space. The system, Zuckerberg said, allows them to get the “lowest possible price.”

He added that combining ads with an effective payment tool such as Libra can benefit businesses further as it could make commerce more efficient:

If we can make commerce be more effective for businesses if when they run an ad, somebody who clicks on that ad is now going to be more likely to buy something because they actually have a form of payment that works that’s on file.

Advertising on Facebook, as such, becomes more worthwhile for businesses, which could in turn see them bid higher on ads and increase overall ad prices. This would effectively boost Facebook’s 0s advertising revenue.

Zuckerberg also reiterated other advantages of Libra, pointing out the payments infrastructure “hasn’t been updated in a very long time.” China, which has plans to launch its own digital currency called DCEP, sees Libra as more than a way for Facebook to make money.

Libra Could Hit China’s Efforts to Increase Yuan Influence

In a book published by the Central Party School of China to educate government officials on digital currency and propose policy measures to deal with emerging challenges like the Libra project, experts argue the latter is an excellent example of a public-private partnership and has the potential to become the future of world currency.

This would mean, according to the book titled “Discussing Digital Currency with Leading Officials,” that Libra could get in the way of the Chinese government’s attempt to increase the influence of the yuan.

Hongzhang Wang, former chairman of the China Construction Bank and one of the authors on the book’s preface, said in a recent article:

China originally relied on mobile payment to get ahead, but now Libra has the potential to change the game again.

Wang added that this would allow companies in the U.S. to build a digital currency system that could “threaten or even surpass” Alipay and WeChat Pay using blockchain technology.

Featured image via Unsplash.