- In a leaked email, the company cited current market conditions for the decision.
- Coinbase to only restart the program in 2023.
- The company’s market share has shrunk from 5.3% in the first quarter of the year to just 2.9%
- The exchange went from 4th place to 14th place in trading volume.
Battered Crypto Exchange announced that it would be shutting down its affiliate marketing program. The firm cited the current market conditions and negative outlook for its decision. According to reports, the marketing program targeted at influencers and publishers will only be relaunching on July 19.
“We regret to inform you that Coinbase will be temporarily closing its affiliate program in the United States with an effective date of Tuesday, July 19,” the email sent to creators reads. “This is not an easy decision, nor was it taken lightly, but due to crypto market conditions and the outlook for the rest of 2022, Coinbase is unable to continue to support incentive traffic on its platform.”
The latest development comes amid the platform laying off 18% of its staff to cut costs. Before the recent affiliate news, Coinbase reduced commission rates for some influencers in June. Reportedly, one creator who was earning $40 per sign-up in early 2022 stated their amount dropped by over 90% to $2 per sign-up. Many believe the latest news is hinting toward Coinbase’s possible downfall.
Coinbase one of the world’s most coveted exchanges is slowly losing its dominance. In April 2021, Coinbase Global’s valuation hit $100 Billion. Unfortunately, for the past six months, its stock has been in free fall, from $381 in November 2021 to $48 on July 5, 2022, sending its market cap crashing to $10 Billion. The company’s share of the market has further shrunk from 5.3% in the first quarter of the year to just 2.9%
Coinbase’s downfall was severe to the point Goldman Sachs downgraded the company from ‘neutral’ to ‘sell’ and lowered its price target to $45 from $70. As per the latest quarterly filing, Retail investors comprise around 95% of Coinbase’s transaction revenue, although institutions account for most of its trading volume
According to data published by Mizuho Securities USA, the San Francisco-based crypto exchange has plunged to 14th place by trading volume. This was down from 4th place in late 2021. The reduction in trading spells danger for an exchange that relies heavily on transaction fees for its revenue. To add to its woes, the company also logged a concerning $430 million loss in the first quarter of 2022.
Apart from the company’s trading volumes and the number of monthly transacting users, the price of Coinbase’s stock COIN is also witnessing new lows.COIN has crashed by over 78% since the start of 2022 and currently trading at $53.79.
Coinbase launched its affiliate marketing program in 2019. The program helps the company connect with influencers, manage rates, and track sign-ups. According to the official website, the marketer would get 50% of each referral’s trading fees for their first three months on Coinbase.com.
The recent suspension of the affiliate marketing program hints at Coinavse’s lack of fiat to pay the influencers. It is worth mentioning that Coinbase has invested $150 Million in over a dozen companies in India, including ZebPay, CoinDCX, CoinSwitch Kuber, etc. So if Coinbase falls, it will severely impact India’s crypto and digital asset firms.