Market Analysis Report (08 Dec 2022)

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Coinbase CEO, Brian Armstrong, says that his company’s revenue this year will be around half of what it was in 2021, citing the impact of the sharp drop in cryptocurrency prices and multiple bankruptcies in the crypto space.

Popular crypto exchange Binance.US has eliminated fees on spot Ether trading for all customers. The exchange made a similar move around six months ago when the exchange first cut trading fees for Bitcoin. Both new and existing users of Binance.US will no longer pay any fees for trading Ether in four pairs: ETH/USD, ETH/USDT, ETH/USDC and ETH/BUSD.

Mastercard’s director of startup engagement, Grace Berkery, believes that the recent bankruptcy of FTX will not deter institutions from entering the crypto industry. Speaking at Benzinga’s Future of Crypto event, she revealed that “once you get the momentum for an institution up and running, it’s hard to get them to turn their head and pivot.”

Top stories in the Crypto Roundup today:

Coinbase CEO Confirms 50% Plus Revenue Decline in 2022
Binance.US Expands Zero Fee Trading to Ether
FTX Collapse Chance For Crypto Market to Reset: Mastercard Director
Market Spotlight: The Aftermath of FTX’s Collapse

Coinbase CEO Confirms 2022 Revenue Will Decline by at Least 50%

In an interview on Bloomberg’s “David Rubenstein Show: Peer-to-Peer Conversations”, Armstrong revealed that “last year in 2021 we did about $7 billion of revenue and about $4 billion of positive EBITDA, and this year with everything coming down it’s looking, you know, about roughly half that or less.”

Coinbase’s stock is down more than 83% this year, and investors are increasingly turning away from crypto companies, particularly in the wake of the collapse of FTX. Despite this, some analysts believe that the long-term outlook for the industry remains positive and that companies like Coinbase will weather the current storm.

Interestingly, several well-known investors, including Bill Ackman and Kevin O’Leary, have come out in support of former FTX CEO, Sam Bankman-Fried, who has claimed that the exchange’s troubles were due to accounting errors. Armstrong, however, tweeted a few days ago that he does not believe this to be the case: “Even the most gullible person should not believe Sam’s claim that this was an accounting error. It’s stolen customer money used in his hedge fund, plain and simple.”

Binance.US Expands Zero Fee Trading to Ether

“By eliminating fees first on BTC and now ETH, we are further cementing our position as the low fee leader in crypto, raising awareness for the high fees consumers are paying on other platforms, and helping to restore trust in the greater ecosystem,” said Brian Shroder, CEO and president of Binance.US.

In addition to eliminating fees on Ether trading, Binance.US is also streamlining the way its fee tier structure works, beginning in January 2023. “We are simplifying our fee schedule to offer two tiers: one that is free and one at our current Tier II rates,” a Binance spokesperson told The Block.

Binance.US launched in September 2019, and has become one of the largest cryptocurrency exchanges by fiat trading volume. The elimination of trading fees for certain popular pairs has helped further increase trading volumes. The exchange had a fiat trading volume of over $10 billion in November, according to The Block’s Data Dashboard powered by CryptoCompare data.

FTX Collapse Offers Chance For Crypto Market to Reset, Says Mastercard Exec

Mastercard has supported the crypto industry for several years through investments and initiatives, and has partnered with firms like Binance, Nexo, and Gemini to launch Mastercard-affiliated crypto cards. Berkery said that over the next 12 months that topics that will be top of mind for traditional financial institutions include value-added services, such as cybersecurity, fraud analytics, identity management and others, that can “really help stabilize the market”.

Berkery also believes that utility NFTs and metaverse-based use cases will continue to be an important area for investors and institutional involvement. “Nothing is off the table,” Berkery said. “It really comes down to how you’re going to bring value to these traditional companies and institutions.”

The pace of financial institutions entering the crypto industry has increased significantly over the past two years. In July, TechCrunch was told by several industry players that there is significant institutional interest in DeFi, and even before FTX’s collapse, institutional interest had not wavered even though many/most cryptoassets are currently trading below their all-time highs.

Market Spotlight: The Aftermath of FTX’s Collapse

The digital asset markets have performed better than expected in the weeks following the collapse of FTX. This was driven by macroeconomic news, with November CPI coming in at 7.7% YoY, the lowest print since January 2022. While this is a static figure, and the Federal Reserve will evaluate upcoming prints, it suggests that the macroeconomic landscape may be starting to improve.

Join CryptoCompare as we explore the week’s post-FTX collapse, as well as the latest trends in the digital asset space, with our market-leading data insights. In our latest blog, we cover:

Recent macroeconomic data and changing trends
Kraken and its early initiatives for transparency
Wrapped Tokens and their depeg following the FTX debacle
Staked Ethereum tokens and their risk profile

State of the Crypto by Top Tier Exchange Volume

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