Could Coinbase’s Position as a Major Crypto Player Be Undermined?

With all of these coins collapsing, Coinbase was compelled to implement a hiring freeze just a few months ago. Coinbase was planned to increase its employees in 2022, however these ambitions did not materialize. This was followed by Coinbase announcing that it will sell around 18 percent of its holdings. This meant that not only would no one be employed, but that many current employees would be laid off. The problem has only gotten worse, and it appears that Coinbase is experiencing the impact.

In a recent interview, Mizuho Securities stated:

We worry that the competitive nature of the industry is likely to require further increases in sales and marketing spend over time and can also weigh on Coin’s take rates. All this, coupled with subdued volume trends, is likely to weigh on profitability moving forward in our view.

Are there any issues with the company’s structure?

They went on to say:

Their business model is seeing structural issues, suffering from a perfect storm of more competition in a declining market while take rates are perceived to be too high and unsustainable.