April Sees a Dip in CEX Trading Volumes and Coinbase App Usage

After three consecutive months of growth, trading volumes on centralized crypto exchanges experienced a decline in April, according to blockchain data provider Kaiko. This dip comes after a red-hot first quarter for digital assets.

Trading Volumes on Centralized Crypto Exchanges Drop in April

Kaiko reported that trading volumes on centralized exchanges had fallen in April, reaching almost half of the volumes recorded in March. The $500 billion recorded in April is the lowest for the year so far, while March saw the highest volumes. The data provider further noted that trade volumes had reached pre FTX collapse levels until the decline in April. Nevertheless, the markets remain above the 2020 levels in terms of trade volumes.

Trade volumes on #CEXs declined in April after rising for three consecutive months and surpassing pre-FTX levels in March.

Overall, however, the crypto market remains significantly larger than it was before the 2020 bull run.#crypto #TradeVolume #liquidity #CEX pic.twitter.com/cmftFD3Qya

— Kaiko (@KaikoData) May 3, 2023

Coinbase App Downloads Decline Ahead of Key Earnings Report

As Coinbase prepares to release its Q1 earnings, investors are eagerly waiting to see if the company can turn the corner after a year of bad news and significant losses. Unfortunately, one key indicator suggests that Coinbase’s pain might not be over. According to Apptopia, a research firm that tracks metrics related to app usage, the number of people downloading the company’s app continues to decline.

Coinbase’s Struggles Continue

Apptopia’s VP of Research, Tom Grant, presented a chart showing that Coinbase’s app downloads have continued to decline, even as trading volumes slightly increased. He noted that this paints a more bearish picture for Coinbase than consensus expectations.

While the company’s income from trading, which accounts for the biggest portion of its revenue, likely jumped substantially in Q1, Grant pointed to another indicator that suggests Coinbase’s troubles are not over.

Coinbase’s Revenue and Regulatory Environment

When Coinbase releases its earnings report, investors will also be looking at other indicators, such as trading volume trends and insights into how Coinbase plans to navigate the increasingly hostile regulatory environment. They will also be looking at how Coinbase’s revenue from USDC has been affected by the stablecoin’s drop in market cap following a brief depegging at the height of the recent banking crisis.

Expected Q1 Net Loss for Coinbase

Analysts predict that Coinbase will report a first-quarter net loss of $329 million, or $1.38 per share, compared to a $429 million loss, or $1.98 per share, in the same quarter last year.

In conclusion, the dip in trading volumes on centralized exchanges in April comes after a strong start to the year for digital assets. While markets remain above 2020 levels, the decline in volumes suggests a cooling-off period for cryptocurrencies. As for Coinbase, the company’s upcoming earnings report will be crucial for its share price and the overall narrative surrounding the crypto industry. 

Despite ongoing struggles, investors are hopeful that the company can turn things around and navigate the increasingly challenging regulatory landscape.