Following the release of Q3 2022 earnings by Coinbase;

Suneet Muru, Analyst at Thematic Intelligence Team at GlobalData, a leading data and analytics company, offers his view:

“It’s been a cold crypto winter for Coinbase, but it should weather the storm. The crypto-exchange’s broad product offering is now its greatest asset. Exchanges need moonshots to diversify their revenue sources from transaction fees to subscription-based solutions, and Coinbase is leading the charge.

“Its recent partnership with Google Cloud achieves this while also lending legitimacy – a crucial trait given the number of hacks that have hit the marketplace. Cloud is a key theme for all tech companies that want to offer cost efficiencies to institutional clients, but especially for Coinbase if it wants to maintain its market dominance.

“Coinbase’s stance on regulation could lead to more conflict with Washington and the company will need to tread carefully. The company has conveniently chosen to back Ripple when it appears to be winning its case against the SEC. While this seems like an attempt to boost public image, it could serve as an early signal for Coinbase potentially relisting Ripple’s flagship cryptocurrency, XRP. This will open the floodgates for increased trading volume on the platform and benefit customers who lost massively following XRPs delisting in January 2021. However, this could also draw the attention of lawmakers in Washington and add pressure for more regulatory scrutiny. CEO Brian Armstrong’s Twitter account won’t be enough for it to emerge victorious in this scenario.”

George Monaghan, Analyst at Thematic Intelligence Team at GlobalData, adds:

“Coinbase now has a strong competitive moat among crypto exchanges. It dominates corporate crypto usage and is relatively untarnished by regulatory problems. But it is nonetheless a crypto exchange, and its success hinges on trading volumes. If crypto stays down for too long, so will trading volumes and with them Coinbase, but if crypto rises again, Coinbase is very well positioned to rise with it.”