Coinbase (COIN 0.09%) is the largest cryptocurrency exchange in the U.S., but it's certainly not the only one. Others include Upbit, FTX, Kraken, LMAX Digital, and many more. With a roughly $36.5 billion market cap and currently trading at more than 34 times forward earnings, Coinbase is not a company that wants to lose market share. In fact, one of its key goals in its early public life while the crypto industry is still evolving is to continue to grow its presence. But has Coinbase lost or gained market share so far in 2022? Let's find out.
Fiat exchange market share
On its fourth-quarter earnings call, Coinbase's CFO Alesia Haas noted that in 2021 the company expanded its trading volume market share by 8.5 times compared to 2020, which grew faster than overall crypto spot market trading volume. Transaction revenue for the year came in at $6.8 billion, six times higher than 2020 transactions revenue.
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In terms of trading volume through crypto exchanges that support fiat currencies, it looks like Coinbase has lost some market share through the first three months of 2022.
If you scroll onto the interactive chart, you can see that Coinbase in January had 31.45% of total exchange volume market share. The data is collected from large trustworthy exchanges. But around the end of March that number had dipped to 27.18%. Meanwhile, Upbit had grown its volume from 12.64% in January to 22.5% at the end of March. Upbit is South Korea's largest crypto exchange, so perhaps it is growing the size of the market instead of actually taking customers from Coinbase. FTX, the other big fiat exchange, also saw its market share decline between January and the end of March but less so than Coinbase. Still, Coinbase's market share year over year has grown from 18.6% to roughly 27.7%.
Monthly trading volume at Coinbase has come down from roughly $120.4 billion in January to about $82 billion in March. Meanwhile, Upbit went from $48.4 billion to roughly $52.5 billion, while FTX went from $67.3 billion to $54.8 billion in the same time period.
FTX is the largest crypto exchange in the world and also has a U.S. affiliate. After raising a $400 million series C round in January, the company is valued at $32 billion in the private markets, which isn't too far away from Coinbase's current market cap. FTX has also seen its market share grow in the Bitcoin futures submarket and FTX U.S. saw daily trading volume in Q3 jump by more than 500% from Q2 levels.
Competition is heating up
The charts above show that competition is heating up, although a player like Upbit could be tapping further into international markets and expanding the market. Coinbase still grew market share quite significantly on a year-over-year basis, so I wouldn't place too much emphasis on the decline so far this year, but it's certainly a trend investors will want to continue to monitor.
