Coinbase, Gemini, and Bullish in the crypto industry are being folded. Their stock price has fallen by up to 55% in the past three months, and Bitcoin is down more than 35% from its October peak. No meltdowns, no hacks, no lawsuits. Just be silent. And that silence is hitting trading platforms the hardest.
These exchanges live and die by trading volume, which is currently drying up. No one is trading. No one is buying it. No one is selling it. Once that happens, the fees will no longer accrue. That’s their business model.
Coinbase’s trading activity in the fourth quarter was probably down 40% year-over-year to $264 billion, according to ClearStreet’s Owen Lau. He also said the platform’s revenue is expected to be less than half that of the same period last year, and that January’s numbers were even worse.
Traders abandon exchanges as prices fall and interest wanes
Bitcoin falling below $80,000 over the weekend wasn’t the only recent plunge in crypto stocks. This autumn shows that people are tired. that they had completely retreated.
“When prices are going up, people trade because they don’t want to miss out. But when the situation is reversed, it’s hard to keep people,” said Peter Christiansen of Citigroup.
It’s not just Bitcoin. Cryptocurrency stocks have also been hurt by investors exiting the technology sector more broadly. People are worried about the cost of AI, worried about war headlines, and tired of losing money on tech stocks. This combination has kept everyone completely away from risk.
Bitcoin has now fallen for four consecutive months, dropping nearly 11% in January alone. This is the longest losing streak since the sharp decline in 2018 after the bursting of the ICO bubble. And it’s not just Bitcoin. After posting its worst week in more than a decade, gold fell sharply again on Monday.
Gemini’s balance sheet has taken a hit. John Todaro of Needham & Company said the company had hoped to break even by 2027, but now looks like 2028.
Meanwhile, at Burish, which primarily serves institutional clients, trading activity was down 28% in January compared to last year, Lau said.
There is no scandal this time, just a loss of interest
Kaiko University’s Laurence Frausen said we are only “about 25% of the way through this cycle.” He believes it could still be six to nine months before things start to improve again.
This slump feels weird. There’s usually something bigger behind it. Regulators cracked down on ICOs in 2018.
In 2022, FTX, Three Arrows Capital, and Terra Luna exploded. At this time? there is nothing. It’s just that the crowd waned and the October crash wiped out the huge leverage.
Despite new Bitcoin ETFs and infrastructure upgrades over the years, trading activity has been sluggish. According to Kaiko’s data, the decline has already begun to rival the worst points of the last major recession in 2021 and 2022.
But this time, people are not panicking. They just sound off.
Some companies are still pursuing leverage on decentralized platforms. Some are running toward what’s hot: AI tokens, prediction markets, sports betting, small-cap tech stocks, and even gold. But big companies like Coinbase and Gemini still have a completely uninterested crowd.
Some are trying to build other services like storage or stocks, but that won’t save them. Their entire business model relies on people trading. And so far, that’s not the case.
A meeting is scheduled between the crypto industry and the banking sector at the White House later on Monday. The goal is to finalize the market structure bill in the Senate. Perhaps it will wake up the market. But in the meantime, exchanges are learning that crashes are not the only cause of disaster. In some cases, you may not need to do anything.
