Coinbase witnesses loss after impacted trading volumes
Technology
Digital assets market has been plagued by pessimism as investors shied away from investments
(Reuters) - Tuesday saw the release of Coinbase Global's fourth quarter loss report as trading volumes at the cryptocurrency exchange were impacted by an industry-wide decline brought on by a number of high-profile bankruptcy filings.
In prolonged trading following findings, shares of Coinbase, which lost almost 86% of their value in 2022, fell by around 2%.
Throughout the last year, the market for digital assets has been plagued by pessimism as investors have shied away from hazardous investments due to rising market volatility and concerns about an impending recession.
Yet the collapse of Sam Bankman-significant Fried's crypto exchange FTX in November dealt the industry's largest hit. After the collapse, businesses engaged in the cryptocurrency sector have come under intense worldwide regulatory scrutiny, and concerns about a contagion effect on other businesses have increased.
The crypto exchange's trading volumes in the fourth quarter fell to $145 billion from $547 billion a year earlier.
The depegging of TerraUSD and the demise of FTX, according to Coinbase, made the situation worse. "As macroeconomic indicators like inflation remained high and interest rates rose throughout the year, crypto market cap declined along with broader equity markets," the company wrote in a letter to shareholders.
Because of the extreme market volatility, retail traders who had previously utilised Coinbase's platform to invest in the major cryptocurrencies like bitcoin and ethereum drastically reduced their trading activity, which saw a quarter-over-quarter decline of over 89% to $20 billion.
