Doge, BTC, ETH, and XRP: Are these alts helping exchanges like Coinbase ‘over-earn’

The ongoing market rally, fuelled by alts, has compelled outsiders to enter the crypto-ecosystem. FOMO has been the catalyst off late. Right from November last year, the number of blockchain wallet users has shown an exponential surge, and as of 11 May, the number oscillated in the 72 million range.  

Source: Statista

With Coinbase stepping into Wall street, its growth in the face of intensifying competition would be challenging, but its potential to diversify its revenue, according to AB Bernstein’s Harshita Rawat, could help its boat have a smooth sail. 

In a recent CNBC interview, AB Bernstein’s research analyst pointed out the near-term volatility and asserted that exchanges like Coinbase were “over earning” as an industry through retail crypto trading fees. However, she expected the same to shrink with time and said,

“Stock brokerages’ commissions came down over the last two decades, so I do think that we’re going to see that with retail crypto trading. Crypto is here to stay, but the trading fees would compress over time.”   

Underlining the fact that crypto trading remained Coinbase’s chief revenue generator, Rawat went on to affirm that Coinbase needed to be valued as an exchange instead of a brokerage. Expressing her crypto-bullishness and calling it an “incredible disruptive technology,” she further stated, 

“Over the long term, the crypto market cap should continue to grow and and trading volumes should also be somewhat elevated because of the 24/7 architecture.”

Source: CoinMarketCap

Looking at the ongoing market cap uptick on CMC’s chart and the increase in the number of blockchain wallets, the trend should likely push itself further.

Source: TheBlock

The growing crypto interest can be further supplemented with what  Google trends point out. Even though Binance controlled over 41 percent of the crypto exchange web traffic in April, Coinbase stood second with an eighteen percent share. Nonetheless, the latter’s search volume touched the peak on 11 April, a couple of days prior to its Wall Street listing. Even though that temporary hike was quick to fall after the listing, its current search volume is more than four times what it accounted for last year.

Source: Google Trends

However, when zoomed out, the exchange’s ‘search popularity’ when compared to cryptocurrencies like Bitcoin and Dogecoin was infinitesimal. Regardless, Coinbase received around the same search volume as that of Ethereum and XRP.