The cryptocurrency market has been devastated once again this year by what happened to a centralized exchange. New reports show that users are still flocking to a centralized US crypto exchange instead of Binance.
This crypto exchange reaches millions of new users amid Binance FUD news
One of the exchanges that faced heavy withdrawals after the bankruptcy of FTX was Binance. While fear is moving away from the leading exchange for now, rival exchanges are becoming the choice of new users, according to reports. The related exchange Coinbase has recorded a significant increase in the number of users despite the decrease in the stock COIN price.
The reports show that Coinbase added 19 million users worldwide between December 31, 2021 and September 30, 2022, representing a growth of approximately 21.35%. The figure means adding at least two million monthly users in 2022.
According to Finbold’s report, Coinbase had 98 million users at the end of the first quarter. This number represents the addition of 9 million users, up from the 89 million in Q4 2021. In Q2, users stood at 103 million, while Q3 recorded the exchange’s highest number of verified users with 108 million.
Elsewhere, Coinbase’s global market share reached 3% among spot crypto exchanges as of December 6, 2022, compared to 2.6% in November. Thus, the share of the stock market has been rising steadily since September. Coinbase’s lowest annual global market share was 1.6% in July. The stock market’s highest market share was seen at 4.2% at the peak of the crypto bull run in November 2021.
Coinbase manages to grow despite bear market
Overall, Coinbase stock suffered from the general sell-off in equity markets. The market downturn has also forced Coinbase to reorganize its business model, choosing to layoffs and freeze hiring. At the same time, the exchange has taken various measures to lure users who are possibly demotivated by the current situation. For example, it allows customers to seamlessly switch from Tether (USDT) to USD Coin (USDC) with zero fees.
Impact of regulations on Coinbase user growth
Exchanges like Coinbase are likely to face further regulatory pressure after the FTX bankruptcy, in which millions of users lost their funds. In particular, a large part of users prefer to withdraw their funds from exchanges for security purposes.
Interestingly, a dispute arose between Coinbase and the SEC after SEC chairman Gary Gensler implied that the exchange was not registered even though it held several securities. cryptocoin.com We have included the details in this article. Notably, the SEC-Coinbase fight stems from uncertainty over the regulation of cryptocurrencies in the US, particularly whether stablecoins are legally defined as securities. Therefore, the outcome of the fight will likely have an impact on the exchange’s user base.
In the future, the number of users verified by Coinbase will likely increase as the exchange sets targets to expand into the European market. The exchange already sees Europe as an ideal marketplace, considering that the region has implemented MiCA. The laws mean that Coinbase will operate in a regulated environment if it enters the European market.
