Coinbase credit ratings lowered by S&P Global on ‘weak earnings,’ competitive risk
The rating agency said Aug. 11 that “weak earnings” and competitive pressure on the crypto exchange have weakened its coverage ratios and “that cyclical variations for Coinbase have increased beyond our previous expectations due to market share erosion and a higher risk of margin compression.”
S&P Global noted that Coinbase’s poor second quarter reports could be traced to increasing uncertainties in the crypto market and rising competition. As a result, Coinbase’s trading volume for the second quarter reportedly declined by 30% while overall trading volume for exchanges declined by only 3%. In addition, competitive risk has risen in the crypto exchange sector and Coinbase’s market share fell in 2022, S&P Global noted.
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