Coinbase

The American company Coinbase was founded in June 2012 and is based in San Francisco, California. Coinbase offers an electronic wallet and a platform for conducting transactions using cryptocurrencies such as bitcoin, Ethereum and Litecoin.

As of September 2021, Coinbase is the second largest cryptocurrency exchange in the world, with about 68 million users from more than 100 countries.

Performance indicators

2022

Trading volume for October - $743 billion

Revenue $3.15 billion; losses - $2.63 billion

At the end of 2022, the Coinbase cryptocurrency exchange received net losses of $2.63 billion against net profit of about $3.62 billion in 2021. Such data are provided in the financial report released on February 21, 2023.

Coinbase revenue in 2022 amounted to about $3.15 billion. For comparison: a year earlier, the crypto exchange received $7.36 billion. Thus, a drop of 57% was recorded. Such a sharp deterioration in indicators reflects the general state of the cryptocurrency industry, which faced a drop in digital asset rates and the collapse of a number of major players. In addition, the future prospects for the development of the market in the current macroeconomic situation remain vague.

Our business solutions do not always match the competitive environment or maximize short-term growth and profit. Rather, they are designed to ensure maximum customer security, the legitimacy of the crypto economy and the sustainability of Coinbase. In the second half of 2022, we changed course and began to cut costs. In addition to focusing on financial performance, we have also expanded our engagement with regulators and taken significant steps to strengthen partnerships, the report said.

At the end of 2022, the monthly audience of Coinbase users making transactions averaged 8.8 million. Revenue in the subscription and service segment was at $793 million. Transaction costs - 20%. The total volume of trading operations on the platform in 2022 reached $830 billion against $193 billion in 2020. As of the end of 2022, approximately 25% of the world's largest hedge funds used Coinbase. The largest investment company in the world in terms of assets, BlackRock, announced a partnership with a crypto exchange.^[1]

History

2023

Who owns the most bitcoins

As of the end of September 2023, the cryptocurrency exchange Coinbase stores approximately 5% of existing bitcoins. This is comparable to the total assets of wallets, which are associated with Satoshi Nakamoto, the creator of bitcoin. Such data was released on September 23, 2023 by Arkham Intelligence, a developer of an address tracking service and visual representation of data in blockchains. More. here

Blocking in Kazakhstan

Since mid-September 2023, the site of the Coinbase cryptocurrency exchange has ceased to open without a VPN in Kazakhstan. Almost two months later, the Ministry of Culture and Information of the Republic officially confirmed the blocking of the resource.

The Information Committee of the Ministry of Culture and Information received a request from the Ministry of Digital Development, Innovation and Aerospace Industry of the Republic of Kazakhstan with a request to block the Internet resource of the www.coinbase.com, which violates paragraph 5 of Article 11 of the Law of the Republic of Kazakhstan "On Digital Assets in the Republic of Kazakhstan," - quotes the publication "Italic" letter of the Ministry of Information.

This law limits the issue and turnover of unsecured digital assets, as well as the activities of crypto exchanges for such assets. Licenses for work in Kazakhstan (they are issued by the Astana Financial Services Regulatory Committee/AFSA) by November 7, 2023 have crypto exchanges Binance, CaspianEx, Biteeu, ATAIX, Upbit, Xignal & MT and Bybit. All of them work on the territory of the Astana International Financial Center (AIFC).

Earlier in Kazakhstan, the sites of the cryptocurrency-friendly online broker Interactive Brokers and the New York Mercantile Exchange (NYMEX) were blocked. However, after public outcry, access to them was restored in full.

Kazakh and foreign companies with minimal resources can obtain a license to work in the AIFC. Firms can offer FinTech and RegTech services without immediate compliance with all regulatory requirements. To register a company, you need to submit a preliminary application, where the concept of project development will be presented. If approved within two months, a full application must be submitted. AFSA will then review the company's offer of admission to FinTech Lab.^[2]

SEC and BlackRock attack Coinbase to take away its business

In order to control the situation in the BlackRock crypto market, you need your own exchange. BlackRock previously became one of the key investors in the FTX exchange, but due to the bankruptcy of the latter, the project lost its relevance. Therefore, it was decided to gain control of another crypto exchange, and the choice fell on Coinbase.

In early June 2023, not only Binance faced lawsuits from the SEC, which operates in conjunction with BlackRock. Coinbase was also charged with offering unregistered securities and working as an unregistered broker. There is a coordinated attack from the SEC and individual state regulators. Coinbase was given a 28-day deadline to justify why it should not be banned from selling unregistered securities.

The SEC filing alleges that 3.5 million accounts were not insured by the Federal Deposit Insurance and Securities Protection Corporation. Thus, customers were deprived of protection from possible losses. SEC chief Gary Gensler noted that Coinbase is denying its clients crucial protections designed to keep them from fraud and manipulation.

For June 2023, the situation is such that Coinbase Custody Trust Company will store the BlackRock cryptocurrency, and BlackRock will sell its trust shares to customers on the NASDAQ exchange. For more details, see iShares Bitcoin Trust.

Negotiations on the opening of a crypto exchange outside the United States due to the deterioration of working conditions in the country

Due to the deterioration of cryptoclimate in the United States in March 2023, Coinbase is negotiating with institutional clients to open a new crypto exchange outside the United States.

SEC is already investigating Coinbase over to trade "unregistered securities."

Coinbase купила One River Digital Asset Management (ORDAM)

On March 3, 2023, cryptocurrency exchange Coinbase announced the purchase of One River Digital Asset Management (ORDAM), a crypto asset management company. Read more here.

Hacking an employee of the exchange using an SMS attack

On February 17, 2023, the Coinbase cryptocurrency exchange reported a cyber attack targeting one of its employees. An unknown attacker stole Coinbase employee login credentials in an attempt to gain remote access to the company's IT infrastructure.

It is said that during the invasion, a limited amount of data from the corporate catalog was disclosed. The cybercriminal received some contact information about several Coinbase employees. At the same time, it is emphasized that the assets and data of customers remained intact.

Coinbase's cyber control tools prevented the attacker from gaining direct access to the system and prevented loss of funds or compromise of customer information, the notice says.

Coinbase shared the results of its investigation to help other companies identify the tactics, methods and procedures of an attacker (TTPs, or Tactics, Techniques, and Procedures - a method of determining the behavior and strategies that an attacker uses in a cyber attack) and establish appropriate protection.

The attack began on February 5, 2023: an attacker sent SMS messages to several Coinbase employees urging them to log into their company accounts to receive some important notification. While most of the employees ignored the SMS, one of them fell for a trick and followed the link, hitting the phishing page, where he entered his credentials. The fraudster then tried to log into Coinbase's internal systems using the stolen information, but was unable to do so because access was protected by multifactor authentication.

Then the cybercriminal switched to a different strategy. He called the same employee of the cryptocurrency exchange, introducing himself as a Coinbase IT specialist. The attacker convinced the employee to enter his workstation and perform some actions. CSIRT Coinbase's security team detected suspicious activity within 10 minutes and promptly contacted the employee. He, as noted, realized that he had become a victim of a fraudulent scheme, and cut off contact with the attacker.^[3]

Will Thomas of the Equinix Threat Analysis Center (ETAC) discovered several additional domains associated with Coinbase and matching the company's description that may have been used in the attack:

• sso-cbhq[.]com;
• sso-cb[.]com;
• coinbase[.]sso-cloud[.]com.

According to experts, the course of action of the attacker is similar to that observed during the phishing campaign 0ktapus in 2022.^[4]

Brother of ex-Coinbase manager Nikhil Wahi gets almost a year in prison for insider trading

In January 2023, the brother of ex-Coinbase manager Nikhil Wahi received almost a year in prison for insider trading. In September 2022, he pleaded guilty.

Cutting 950 people or 20% of staff due to FTX collapse

On January 10, 2023, the largest USA cryptoexchange in Coinbase announced plans to restructure the business in order to reduce costs by 25%. This initiative provides for a reduction in staff - every fifth employee will leave the company.

Coinbase founder and CEO Brian Armstrong announced the reorganization program. According to him, in 2022, the cryptocurrency market began to decline against the background of the current macroeconomic situation, which led to the need to make adjustments to the business model. Armstrong stressed that "Coinbase has enough capital, and the cryptocurrency will not disappear," but staff reductions are necessary.

As we examined the scenarios for 2023, it became clear that we would need to cut costs to increase the chances of success. Although it always hurts to part with colleagues, there is no way to reduce costs without changing the number of employees, "wrote Brian Armstrong.

The staff will be reduced by 20%, or approximately 950 people. According to the company, total restructuring costs will range from $149 million to $163 million, including from $58 million to $68 million in severance pay and other payments to dismissed employees. In addition, it is planned to close some projects, the prospects of which look vague. Which programs will be curtailed, the head of Coinbase did not specify, saying only that they have a "lower probability of success." The rest of the initiatives, as noted, will be implemented in the same mode.

In his message, Armstrong mentioned the "fall of a major competitor." This refers to the collapse of one of the industry's leading players, the FTX. This, according to the head of Coinbase, dealt a serious blow to the market and led to increased pressure on the cryptocurrency sector.^[5]

$100 million New York State Agreement for Money Laundering Violations

In January 2023, Coinbase entered into an agreement with New York regulators for $100 million for anti-money laundering violations.

The New York State Department of Financial Services said on January 4 that Coinbase would pay a $50 million fine for lax compliance measures and spend another $50 million on a two-year program to improve its systems.

The DFS said Coinbase's anti-money laundering enforcement systems were "immature and inadequate," making the exchange "vulnerable to serious criminal conduct," including "examples of fraud, possible money laundering, suspected child sexual abuse material and possible trafficking drugs."

2022

Apple blocks Coinbase crypto wallet update after refusing to pay 30% fee on NFT sending fees

At the beginning of December 2022, Apple requires that payment of fees for sending NFT go through the App Store payment system and be subject to a 30% fee.

Insider manager arrest

In July 2022, a Coinbase product manager was arrested in the United States for passing information about tokens to friends before they entered the exchange and the price rose. In less than a year, the defendants were able to earn $1 million.

Reduction of 18% of the state

On June 14, 2022, the operator USA of Coinbase Global, the largest cryptocurrency exchange, announced mass layoffs. The company is forced to take this step in order to maintain business stability during a period of economic downturn.

Coinbase Global CEO Brian Armstrong told employees the company had made the difficult decision to reduce its headcount by about 18%. In an email first sent to employees and then published on Coinbase's blog, Armstrong revealed why the company decided to take such drastic action, citing the current downturn in the cryptocurrency market, concerns about a wider and longer recession.

Coinbase Global employs about 5 thousand full-time employees, which means a reduction in the number of personnel by about 1.1 thousand people. The company's employees will have access to a talent center to find new jobs in the industry, including portfolio companies Coinbase Ventures.

{{quote 'Our employee costs are too high to effectively manage this uncertain market. While we did our best to get it right, in this case it's clear to me that we've gone overboard on hiring. We will continue to invest in innovative areas of cryptocurrencies, which we believe will appear in the long term, but we will do it more carefully, "said Brian Armstrong, CEO and co-founder of Coinbase Global. }} President and COO Emily Choi talked about how Coinbase Global will continue to double down on efforts in areas such as security and compliance, and possibly refocus employees on making a profit in the near term. According to the document, those affected by the layoffs will receive at least 14 weeks of severance pay, plus an additional two weeks for each year of work in excess of one year, as well as four months of health insurance. Coinbase Global joins dozens of other tech and cryptocurrency companies in stalling hiring.^[6]

Loan from Goldman Sachs secured by bitcoins

In early June 2022, the world's second largest exchange Coinbase took out a loan secured by bitcoins. The money was provided by one of Goldman Sachs' largest investment banks.

Coinbase sent a demand to users from Russia to withdraw funds from wallets

It applies to those who have more than 10 thousand euros on wallets - they need to be withdrawn by May 31, 2022, or provide evidence that the owner of the wallet does not fall under EU sanctions. At the end of April, restrictions on users from Russia were introduced by another crypto exchange - Binance - in accordance with the fifth EU sanctions package.

Blocking 25 thousand addresses associated with Russia and their transfer to the US authorities for sanctions

On March 7, 2022, it was announced that cryptocurrency exchange Coinbase had identified and blocked more than 25,000 addresses related to Russian individuals or entities that "engage in illegal activities." The platform transferred information about them to the US authorities for sanctions enforcement.

Coinbase stopped cryptocurrency transactions in Russia

On February 28, 2022, Coinbase stopped cryptocurrency transactions in Russia amid a special operation in Ukraine.

Expansion of the staff for the development of decentralized Internet Web3

In mid-February 2022, the cryptocurrency platform Coinbase announced that it plans to add 2 thousand employees to its product, engineering and design teams, because the company's management sees huge opportunities for the future of the third generation Internet Web3 based on. blockchain Thus, the company's staff will double.

American Coinbase operates a cryptocurrency exchange platform. The company is also a key provider of blockchain-based analytics software to a range of federal agencies. It is worth noting that in 2018 the cryptocurrency company reduced its staff, some representatives of the user support service, the legal compliance department and the fraud detection department left the organization.

We believe that our industry is in its infancy and that creating pathways for private participation is critical to the development of next-generation cryptocurrencies. We are also expanding to include products that host user-generated content such as the NFT, and we are excited about our ambitious plans for the future of Coinbase Wallet, increasing security, ease of use and accessibility. We are steadfast in our commitment to building long-term projects throughout cryptocurrency cycles, "said Coinbase HR Director LJ Brock[7]

Partnership with Mastercard to simplify the purchase of NFT

On January 18, 2022, Coinbase Global Inc., the largest cryptocurrency exchange in the United States, announced a partnership with payment giant Mastercard, which aims to simplify the process of buying NFT.

Through the partnership, Mastercard classifies the NFT as "digital goods," allowing cardholders to make NFT purchases with both credit and debit cards, a change in the status quo in the U.S., where many cryptocurrency purchases are supported only with debit cards.

FairX Futures Platform Purchase

The largest USA cryptoexchange in Coinbase on January 13, 2022 announced the purchase of a futures platform. The FairX press release emphasizes that FairX operates in accordance with the regulations established by to trade the Commodity Futures Commission. USA More. here

2021

Purchase of Israeli cryptosecurity provider Unbound Security

At the end of November 2021, the crypto exchange Coinbase acquired the crypto security service provider Unbound Security. The financial terms of the deal were not disclosed. Read more here.

Purchase of BRD crypto wallet service

On November 24, 2021, the American cryptocurrency exchange Coinbase announced the acquisition of BRD, a company specializing in crypto wallets. Financial and other terms of the transaction were not disclosed. After the acquisition was announced, the value of the BRD token soared about 500% from $0.16 to $0.96, according to CoinMarketCap. Read more here.

Buying Indian startup Agara

On November 2, 2021, Coinbase announced its first acquisition in India. Taken over by startup Agara, which runs an AI-powered customer support platform. Read more here.

Attacker stole cryptocurrency from 6,000 exchange customers

In early October, crypto exchange Coinbase reported that an attacker stole cryptocurrency from 6,000 customers after exploiting a vulnerability to bypass the company's multifactor SMS authentication security function.

In a notice sent to affected customers this week, Coinbase explains that between March and May 20, 2021, the attacker carried out a hacking campaign to hack Coinbase customer accounts and steal cryptocurrency. To carry out the attack, attackers needed to know the email address, password and phone number of the client associated with their Coinbase account and have access to the victim's email account.

U.S. SEC Warning Against Launching Lend Product

In September 2021, Coinbase Global Inc. received a warning SEC USA about the inadmissibility of launching a Lend product.

The platform is similar to the business of BlockFi, a centralized lending to customers secured by cryptocurrency. Some of the liquidity for such a landing could be provided by exchange customers, receiving in return part of the interest on loans issued.

The SEC considers Lend to be "securities related, but does not say why or how they came to this conclusion."

In recent months, various government agencies have issued warnings about similar revenue bills from BlockFi Lending LLC. Regulators are considering going after other companies that offer similar products.

$500 million cryptocurrency purchase plan

In August 2021, it became known that the Coinbase crypto exchange will buy cryptocurrency for $500 million, and will also invest 10% of profits in digital assets.

"We will become the first public company to own Ethereum, Proof of Stake protocol assets, DeFi tokens and other altcoins available for trading on our platform in addition to Bitcoin."

"The distribution of investments in crypto assets will be determined by the total balances of cryptocurrencies in the repository - that is, our clients will determine our investment strategy"^[8].

Cryptocurrency exchange launch in Japan with Mitsubishi UFJ Financial Group

In August 2021, Coinbase Global Inc. teamed up with Mitsubishi UFJ Financial Group to launch a cryptocurrency exchange in Japan that allows account holders at the country's largest bank to buy and sell virtual currencies.

The company began by allowing trading of five digital tokens: Bitcoin, Ethereum, Litecoin, Bitcoin Cash and Stellar.

Although Coinbase started in Japan with a focus on retail customers, the company is "optimistic about the institutional business outlook."

Obtaining a license to store cryptocurrencies in Germany

The largest cryptocurrency exchange Coinbase in June 2021 received a cryptocurrency storage license from the German Financial Supervision Authority (BaFin), which allows Coinbase to continue serving the German market.

Coinbase is the first company to receive such a license, BaFin said in a press release.

Closing offices, switching to remote

In early May 2021, Coinbase announced it would abandon its headquarters and close its San Francisco office. The world's largest cryptocurrency exchange has decided to transfer its employees to remote work.

The company intends to close its San Francisco office (formerly its headquarters) in 2022. At the same time, Coinbase is going to use a network of "small office space" for those employees who do not want or cannot work remotely.

Closing our San Francisco office is an important step to ensure that no office becomes an unofficial headquarters. It will mean that career prospects will depend on opportunities and performance, not location, the company explained.

The fact that Coinbase employees will be able to continue working from home even after the pandemic (COVID-19) restrictions are lifted, the head of the company Brian Armstrong said earlier. Remote work "represents a huge opportunity and strategic advantage" for the exchange, he said.

Armstrong noted that the requirement for a distance of 1.8 meters (6 feet) between employees would not allow them to fit again at headquarters in San Francisco. Therefore, the company decided to take an "innovative path" and decentralize work in accordance with the principles of the cryptocurrency world. He said that up to 60% of workers will be able to continue remote work.

As Bloomberg notes, the idea of ​ ​ decentralization is at the heart of crypto and related companies, whose employees are scattered around the world to avoid regulation. For example, the cryptocurrency exchange Binance also does not have a separate headquarters.

We have committed to not having a headquarters, and it is important to show our decentralized employees that no location is more important than another, Coinbase said in a statement.[9]

ICE sells all Coinbase shares for $1.23 billion

In April 2021, Intercontinental Exchange (ICE), operator of the New York Stock Exchange and Bakkt platform, fully sold $1.23 billion of Coinbase crypto exchange shares. The proceeds will go to profit for the second quarter of this year.

Going public on Nasdaq

On April 14, 2021, trading in shares of the Coinbase cryptocurrency exchange began on the Nasdaq exchange. The company set the IPO price at $250 per share.

The reference price is set based on the recommendations of financial advisers and quotations during preliminary trading. Conservative values ​ ​ are usually chosen, and the fall of shares below them in the first days is considered a negative sign from the standpoint of the company's assessment by investors.

At the time of the opening of the exchange, the value of Coinbase securities was $381, and during the day it rose to $429.54. By the close of the trading platform, the company's quotations amounted to $328.28, and its market capitalization - $85.8 billion.

At the same time, analysts interviewed by CNBC urge potential investors to be careful, pointing out that Coinbase's business is based on trading two main cryptocurrencies: bitcoin and ethereum. Since the end of 2020, they have been showing record growth, but at the same time they are subject to volatility (price variability), which means that they can fall in price at any time, which has already happened in 2018.

According to experts, it is much more difficult to evaluate Coinbase's business than most startups, since the exchange previously did not calculate classic indicators such as profitability, price-to-profit ratio and capital. Also, the company may face difficulties due to the need to comply with the strict requirements of the classic exchange. It is noted that by mid-April 2021, Coinbase does not even have its own headquarters.

Coinbase chose the option of going public, bypassing the traditional IPO procedure - through a direct listing. In this case, the company does not issue new securities, existing shares of investors and employees are sold on the exchange. This reduces the costs of investment bank services.

The report of the American regulator indicates that with the last private deal with Coinbase shares, investors valued it at $67.6 billion. In February 2021, Axios wrote that Coinbase's estimate exceeded $100 billion.^[10]

Coinbase staff swap digital engagement rings on blockchain

In March 2021, employees of the Coinbase crypto exchange Rebecca Rose and Peter Kacherginsky got married by recording a memorable event on Ethereumblockchain-. NFT The couple spent $587 on the release of non-replaceable tokens (), which replaced them with traditional rings.

Instead of traditional marriage vows and attributes, Coinbase employees decided to make appropriate entries in the distributed blockchain network. Rebecca Rose works as the head of the design department of the crypto exchange Coinbase, and Peter Kacherginsky serves as the chief security engineer for the trading platform..

Most people marry in temples, on the beach or in the mountains. Peter and I are not the majority. We got married on the blockchain, Rebecca Rose wrote on her Twitter blog.

To enter data on the concluded marriage into the blockchain, Coinbase workers created their own non-replaceable tokens (NFTs) called Tabaat, which means "ring" in Hebrew. The tokens recorded an animation created by the artist Karl Johan Hasselrot, on which two circles rotate around each other, after which they merge together, turning into one large circle. According to Peter and Rebecca, this symbolizes "the bond of marriage when the two entities become one."

Peter Kacherginsky was engaged in the creation of NFT tokens on his own. He wrote 2,218 lines of code and then paid 0.25 ETH to issue a smart contract on the Ethereum blockchain. The newlyweds carried out three more transactions with digital rings and, as a result, the costs of implementing their plan amounted to $587.

Rose does not rule out that their idea could be the beginning of a new business project. In the future, Peter and Rebecca intend to give a friend tokens for each wedding anniversary, and also plan to create a blockchain application that will allow other users to create their own tokens.^[11]

NASDAQ Exit Plan

The valuation of the cryptocurrency exchange Coinbase Global amounted to about $90 billion, based on the price of its shares on the Nasdaq Private Market platform.

This value is based on $350 per share, the price at which the shares were traded at Nasdaq Private Market in early March 2021.

Cryptocurrency exchange Coinbase plans to go public at the end of March, it intends to enter the NASDAQ using a direct listing.

Such a placement could be the first direct listing on the trading floor, an alternative to the traditional IPO.

All such prior listings were on the New York Stock Exchange, including those of Spotify Technology SA, Slack Technologies Inc., Asana Inc. and Palantir Technologies Inc.

Investing in the Rarible Digital Art Marketplace

In early February 2021, as part of a round of seed investments, a startup with Russian roots, Rarible, raised $1.75 million. The round was headed by the 1kx crypto fund, CoinFund, ParaFi and the Coinbase crypto exchange also took part. Read more here.

2018

Cryptocurrencies in a tailspin: exchanges lose customers

There is a sharp decline in interest in cryptocurrencies around the world, Bloomberg reported on October 11, 2018. Uncertainty in the traditional stock market has spread to this area, plus the decline in cryptocurrency quotes, which began after the Bitcoin exchange rate reached a peak value of $20 thousand in December 2017, affects.

According to venture capital firm Tribe Capital, the world's largest cryptocurrency exchange has been hit particularly hard, with the Coinbase number of regular players on the platform down 80% since December 2017. Bitcoin fell 60% over the same period.

Tribe Capital analyzed available data on credit cards and other identifiable bank transactions. The results obtained cannot be called comprehensive; they concern only American transactions, but they clearly demonstrate the general trend.

Tribe Capital is an investor in another crypto exchange - SFOX, aimed at "institutional" investors. There is also a decline in interest on this exchange.

The online publication Recode notes that in October the Coinbase exchange is trying to attract investments of $500 million, while its total capitalization is $8 billion. If this stage of financing is successful, its capitalization will be five times higher than last year, when the rapid growth in the value of cryptocurrencies was just beginning. And if not for a sharp decline in their value, Coinbase would have been even higher.

As of October 2018, many crypto exchanges are seeking to reduce their dependence on crypto markets. Coinbase, for example, develops new tools such as custodial services for storing large volumes of digital assets, and also expands trading functionality, such as risk management and margin trading. However, according to people familiar with the circumstances, so far Coinbase cannot boast of special successes in this direction - the "bearish" trends in the market are too strong.^[12]

With an explosive increase in interest in any new technologies, sooner or later there is a more or less proportional decrease. Some particularly pessimistic analysts even predicted the cryptocurrency market to repeat the situation of the late 1990s, known as the "dot-com crash," said Georgy Lagoda, CEO of SEC Consult Services. So far, we are seeing an inevitable correction rather than a collapse, and this, given all the accompanying negativity - leaks, embezzlement of funds, numerous cases of fraud - is rather good news.

Exchange traffic is falling. Vitalik Buterin predicts crypto-bubble bursting

On July 31, 2018, the creator of the Ethereum blockchain ecosystem, Vitalik Buterin, expressed his opinion on Twitter about the current state of the cryptocurrency market, responding to a tweet that indicates a drop in web traffic on the Coinbase exchange that has occurred since the beginning of 2018.

The author of the tweet, cryptosceptic Tim Swanson wrote:

"Are SimilarWeb data correct? Below are statistics on total visits to the Coinbase exchange from stationary and mobile devices over the past six months. "

Buterin commented:

"And what, is someone surprised? Kryptopuzyr is about to burst. "

This is not the first time Buterin has expressed his thoughts on the ups and downs in an unsustainable crypto market. In June 2018, he noted that "bubbles are impossible to get rid of otherwise than allowing them to go through their course and burst in the end."

Statistical platform SimilarWeb also commented on Swanson's tweet:

Given that December 2017/January 2018 was accompanied by a surge in traffic, the "fall" rather indicates a return to normal "

Coinbase CEO Brian Armstrong noted that recessions are a great time to reorient specialists when they can start work on the ultimate task - introducing cryptocurrencies. Armstrong believes that the crypto industry with cycles of ups and downs is unique, and although at first such jumps can scare the uninitiated, it is worth spending several years in this industry, as such a picture becomes familiar.

Ups and downs affect people too much - many are pessimistic about cryptocurrency declines, but Armstrong considers this behavior unreasonable. He notes that the state of the crypto market reflects the number of transactions per day rather than the exchange rate. However, the unstable dynamics of the crypto market allows you to get rid of random people, and the rest use these cycles to create a solid basis for success.^[13]

Launch of index fund for cryptocurrencies

Cryptocurrency exchange Coinbase in March 2018 announced the launch of the Coinbase Index Fund, which displays the financial dynamics of all assets on GDAX based on their market capitalization. Thus, with the help of the fund, investors will be able to track the indicators of the class of digital assets as a whole, without the need to choose any specific cryptocurrency. Read more here.

Notes