In the 3 quarters of 2023, Coinbase has seen a 16% decline in Monthly Transacting Users (MTUs) – defined as consumers who actively or passively transacts in one or more products on the platform at least once during the rolling 28-day period ending on the date of measurement – and a 54% decline in trading volume. Consumer trading volume is down 69% while institutional volume is down 50%.

Total transaction revenue in the YTD is 51% lower than in the same period last year. 48.7% of all customer crypto assets held by customers and 37% of transaction revenue is from Bitcoin. The company has registered a loss in trading volume in virtually every crypto asset except for Bitcoin, wherein the share of trading volume registered a 28% increase. Stablecoin USDC witnessed a 400% increase on the back of a strong dollar continuing to throttle the competitiveness of American goods and services and a flight of capital from broader equity markets into a narrow band of instruments that includes Treasury bills, high-quality corporate paper, and dollar-backed assets. The company’s stablecoin business is a pretty straight-forward business with enormous potential: they’re often needed to imply “real world value” onto various crypto chains and is expected to continue to capture and develop interest in the future.

Coinbase also just received a full business license to operate in Singapore in a bid to attract a lot of international business, predominantly institutional players. The U.S. accounts for 89.5% of the business in YTD 2023, which is up from 82.8% in the same period last year. The Singapore connection might prove to be transformative for the company’s bottom line in the future.

It is perhaps intuitive that – given its preponderance in the company’s revenue streams – Bitcoin’s trajectory informs that of Coinbase stock. While Bitcoin is meandering in the near term, it is noted that BTC generally tends to rally ahead of and following its halving cycles.

A “halving” has been a pivotal event for Bitcoin’s blockchain wherein the reward for mining 1 Megabyte (MB) of transaction records is cut in half. Empirically, the rate at which new Bitcoin is created decreases by half for every 210,000 blocks mined — roughly every four years. This has happened three times in the past.