Business Insider reports that Coinbase is temporarily shutting down its US affiliate marketing program. According to an email sent to three creators, the cryptocurrency exchange will suspend its program starting July 19, citing current market conditions and a negative outlook for the cryptocurrency industry.
Ben Armstrong, a crypto influencer and creator of Bitboy Crypto warned its followers that recent history suggests Coinbase may be in insolvency trouble. Mike Dudas, co-founder of 6th Man Ventures, also called the crypto exchange’s NFT platform a failed launch.
Coinbase shut down their affiliate program and are getting rid of CoinBase pro. Recent history would suggest there could be trouble ahead for CB so tread lightly.
If Coinbase were to go insolvent, this would break crypto the crypto space like we have never seen before.
—Ben Armstrong (@Bitboy_Crypto) July 16, 2022
Coinbase struggling amid crypto winter
Coinbase suspended its affiliate program citing market conditions. Coinbase’s stock price fell nearly 85% from an all-time high of $357 to $53.79 currently.
Recently, Goldman Sachs downgraded Coinbase’s rating to sell as the platform struggled due to the continued bear market. Coinbase’s value, which stood at $75 billion last year, has been reduced to a mere $12.4 billion.
In a letter to its shareholders, the company indicated that the results of its first financial quarter are directly impacted by market volatility. It reported a financial loss of $430 million in the first quarter of 2022. Trading volume and assets on the platform both saw a significant decline.
They also revealed that they were going to decrease their workforce by 18% as a cost-cutting mechanism.
Coinbase faces fierce competition from Binance
Coinbase faced stiff competition from other centralized exchanges like FTX and Robinhood, but especially from Binance. Binance.US, the US arm of global cryptocurrency exchange Binance, recently announced the launch of a fee-free bitcoin spot exchange product. On the other hand, Coinbase has cash transaction fees that can go as high as $3.99.
“Coinbase’s fees … up to 3.99%. https://t.co/ysk3V107gI charges up to 0.20%. https://t.co/hSHrrlFFdF launched fee-free bitcoin spot trading for all users.”
Minor correction: exchanges (at least https://t.co/hSHrrlFFdF) does not make money on spread.https://t.co/5mLJ1LAewL
— CZ 🔶 Binance (@cz_binance) July 15, 2022
Binance CEO Changpeng”CZZhao, also took to Twitter to point out the disparity in the two companies’ fee structure. He also revealed that Binance.US does not make money on the spread either.
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