Coinbase Sees Trading Volume Drop Over 80% as Binance, OKEx Grow

Francisco Memoria
  • While San Francisco-based exchange Coinbase saw its trading volume decline by over 80% this year, other exchanges have seen it surge.
  • Coinbase's decline may attributed to its declining popularity, and to it not using the controversial cryptocurrency Tether (USDT).

Popular San Francisco-based cryptocurrency exchange Coinbase has seen its trading volume plummet 83% this year, while top crypto exchanges outside of the US, Binance and OKEx, have seen their volumes surge.

According to a report published by cryptoasset research firm Diar, citing data from CoinApi, over half of all cryptocurrency trading volume “revolves around the majors, Bitcoin, Ethereum, XRP, Bitcoin Cash and Litecoin.”

While Coinbase lets users trade most of these cryptos, the exception being XRP, its volume has plummeted, along with that of Bitstamp and Kraken, two well-known exchanges. The plunge, per the report, can be attributed to a decline in USD-denominated cryptocurrency trading.

While these exchanges have suffered, Binance and OKEx, two exchanges planning to set up operations in Malta, have been growing. The report reads:

Traded volumes on Coinbase, Bitstamp and Kraken have seen steep declines. Meanwhile, token exchanges outside the US, that have lax regulator scrutiny, are now seeing an increase in traded volume with the majors.

Its data suggests that in July Coinbase saw a trading volume of about $4 billion, down from $21 billion in January. Similarly, Bitstamp’s volume plummeted from about $8.5 billion to about $2 billion in July.

Meanwhile, Binance saw its volume go from roughly $15 billion in January to about $9 billion in June before jumping to $12 billion in July. OKEx notably went from about $5 billion in the beginning of the year, to a record $5.5 billion in July. This, after recovering from about $2.6 billion in April.

Coinbase’s decline may be attributed to various factors, with its declining popularity being one of them. As reported, the exchange saw its traffic plunge from 126 billion monthly visits in January, to about 28 million in June.

As some analysts have pointed out, neither Coinbase nor Bitstamp, the exchanges that endured the largest volume decline, trade in the controversial cryptocurrency Tether (USDT), often believed to be used to manipulate bitcoin’s price. As covered, study conducted by University of Texas professor John Griffin suggested USDT tokens were used to manipulate the cryptocurrency’s price last year, helping it surge to nearly $20,000.

Notably, analysts from New York-based global asset management firm Sanford C. Bernstein found that, last year, Coinbase managed to get nearly 50% of the $1.8 billion exchanges generated in crypto trading revenue. This year, the revenue is expected to double to $4 billion, although Coinbase may no longer be in the lead.

As Diar pointed out, Coinbase has been increasingly moving to add various altcoins to its platform. Earlier this year it announced it was considering five cryptocurrencies: Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM), Zcash (ZEC), and 0x (ZRX).

Overstock CEO Sells Shares in His Company to Invest in Blockchain Projects

Patrick Byrne, the chief executive officer of Overstock.com (OSTK), has recently lashed out at investors who questioned his sale of 900,000 of his ‘founders shares’ in the company. Justifying his move, he revealed he needed the funds to invest in blockchain projects.

According to Business Insider, Byrne recently sent a letter to shareholders after the company’s stock prices plunged over 21% this week to their lowest since 2012, after he revealed he sold 500,000 of his shares earlier this week.

On Friday, the CEO revealed he sold an additional 400,000 shares, meaning he sold over 15% of his stake in the company. Although Overstock’s shares recovered on Friday, May 17, Byrne’s letter to shareholders was notable. In it, he wrote:

I simply had to supplement my nominal salary with stock sales in order to fulfill personal commitments to invest personally in blockchain projects such as Medici Land Governance, along with a need to meet charitable pledges.

The CEO added that he doesn’t plan on giving such an explanation again, justifying that he owes shareholders “staying within the law and not making decisions based on inside information, not explanations of my life and projects outside Overstock.”

He noted that the “unanticipated stir” caused by his sale was unexpected, and added “I had no idea that shareholders would demand explanations of why and how I might want to use my cash derived from my labor and my property to pursue my ends in life.”

Byrne is notably Overstock’s largest shareholder, and noted he told investors a year ago he would be making “significant sales” to fund different projects, including those related to blockchain technologies and, presumably, cryptocurrencies.

In fact, the libertarian sold 775,000 of his shares in September of last year, before this week’s sale. The stock’s price has fallen roughly 90% from its record high in January of 2018, when Overstock was benefitting from its cryptocurrency ventures and accompanying the cryptocurrency market’s performance.

In November of last year, Byrne revealed he had plans to sell Overstock’s retail business and go “all-in” on cryptocurrencies and blockchain technology. The CEO’s plan would see the company focus on its fully-owned subsidiary Medici Ventures, which has been invested in blockchain-related startups, after selling its retail business.

Overstock's price performance over the last two yearsSource: Yahoo Finance

Byrne has notably been battling short sellers targeting Overstock, as the firm competes with the likes of eBay and Amazon. Financial analytics firm S3 Partners has estimated short bets against it stand at $157 million, or 50% of its float. This makes it more targeted by short sellers than 99% of companies in the U.S.

Despite the company’s performance on exchanges, Overstock has since launched its tZERO security trading platform, and was one of the first companies to pay a “portion” of its taxes using bitcoin in Ohio.