Altcoins Overtake Bitcoin And Ethereum Transactions On Coinbase
Crypto exchange giant Coinbase has said that altcoin transaction volume continues to increase its share on the platform at the expense of the two largest crypto assets, Bitcoin and Ethereum.
The firm has released details of transaction volumes in its financial year quarter three report and letter, which was shared with shareholders. In the report, the firm stated that the total trading volume fell to $93 billion, a decrease of 36% from quarter two figures.
Institutional trading volume also saw a drop, falling by 24% to $234 billion. However, compared to the third quarter report in 2020, retail trading volume has jumped by 417% and institutional trading volume has seen an increase of 767%.
The third quarter report showed that non-BTC/ETH coins had a strong quarter. This time last year, almost a third of all transactions made on the platform were in Bitcoin (BTC), this has now dropped to just 19%. In the second quarter report in 2021, Ethereum (ETH) accounted for over a quarter of total volume, this has now dropped to just 22% in quarter three.
Bitcoin and ethereum constitute a larger share of institutional trading volume compared to retail although we are starting to see institutions increasingly diversify into other crypto assets as well.”
The firm also said that it was “tightening” its full-year forecast “scenarios”, for a “high average 2021 retail MTU figure of 8.5 million,” which “assumes moderate-to-high crypto asset price volatility as we have seen in the month of October.”
The reason behind altcoin growth
Bloomberg reported that the spark in altcoin growth may have been encouraged by the listing of Shiba Inu tokens on the exchange. Bloomberg wrote, “Coinbase benefited from listing [the] shiba inu (SHIB) meme token, popular with investors, in September. That, combined with a bull market in crypto that’s pushing more investors to step in, has led to a surge in downloads of Coinbase’s main mobile app.”
Nasdaq data shows that the price of Coinbase shares in the hours after the report went public, experiencing drops of around 13%.
Coinbase went on to explain that its falling trading volumes over the quarter were “roughly in line with the overall crypto spot market volume.” This was seen by the sequential decline in retail trading volume which was driven by lower levels of volatility. Coinbase also confirmed its commitment to buying more crypto noting that it has recently announced a new crypto investment policy.
