In a remarkable development, Jamie Coutts, a renowned crypto analyst, highlighted that Coinbase, a leading cryptocurrency exchange, has outshone two of the globe’s largest securities exchanges in terms of transaction revenue. This significant achievement signals a shift in the financial landscape, where digital currency platforms are beginning to rival traditional financial institutions.
Coinbase Surpasses Major Exchanges in Revenues
According to Coutts, Coinbase has generated a remarkable $5.75 billion in revenue over the past year. In contrast, NASDAQ, home to tech giants like Apple, Google, and Microsoft, reported $4.54 billion, while the Hong Kong Stock Exchange (HKEX) posted $2.67 billion. Additionally, Coinbase outperformed Brazil’s Bolsa Balcão, which earned $1.81 billion. Although these figures are not directly comparable due to varying transaction fees across different platforms, they underscore Coinbase’s growing influence in the financial world. Coutts’ analysis reveals that globally, major crypto, stock, and commodity exchanges collectively amassed around $51.27 billion in transaction revenue over the same period.
Interestingly, the London Stock Exchange (LSE) topped the revenue chart with $10.82 billion, followed by the Intercontinental Exchange (ICE), which manages the New York Stock Exchange (NYSE) and various futures, debt, and commodities exchanges, with $9.16 billion in transaction revenue. Despite these impressive figures, Coinbase’s performance is noteworthy given its relatively recent entry into the financial arena.
Still Behind In Volume
Despite its impressive revenue figures, Coinbase still lags behind in transaction volume compared to established exchanges like NASDAQ. Mouloukou Sanoh, CEO of MANSA Finance, a global decentralized finance platform, observed that while Coinbase’s transaction revenue is substantial, its transaction volume remains lower than that of NASDAQ. He elaborated, “Coinbase charges higher fees, which explains their higher transaction revenue, but they still trail behind in terms of sheer volume.” Sanoh is optimistic about Coinbase’s future, predicting that it could secure the third spot in total transaction revenue by 2025, although surpassing NASDAQ in volume may take a decade or two.
A Long Way To Go
Sanoh expressed a long-term vision, suggesting that it might take 10 to 20 years for crypto exchanges like Coinbase to completely eclipse traditional markets in terms of volume. However, he remains optimistic, stating, “I wouldn’t be surprised if, by the turn of the decade, Coinbase emerges as the largest global exchange, both in volume and trading revenue.” He credits this potential to Coinbase’s growth prospects in regions such as Latin America, Africa, and Europe, beyond its core market in the U.S. Sanoh believes that with strategic international expansion, particularly under new administrative leadership, Coinbase could witness substantial growth in revenue and volume.
Currently, Coinbase has a significant journey ahead to surpass NASDAQ in terms of trading volume. While Coinbase recorded over $10 billion in trading volume within the past 24 hours, NASDAQ reached nearly $445 billion, highlighting the formidable gap that still exists.
Crypto Sector Poised For Significant Re-rating
The broader crypto sector is rapidly gaining ground on traditional finance (TradFi) in several key areas. According to the analyst, centralized exchanges (CEX) and decentralized exchanges (DEX) are experiencing growth rates of 2.5 to 4 times faster than TradFi. DEXs, in particular, rank among the most profitable applications globally. If the CEX sector were valued akin to Coinbase, its market capitalization could soar to an impressive $749 billion, compared to TradFi’s current $610 billion.
Looking ahead to 2025, the analyst anticipates significant trends, including TradFi’s potential catch-up through CEX acquisitions and increased crypto integrations. CEXs might list on traditional exchanges and develop their own DEX platforms. The tokenization of real-world assets (RWA) is expected to elevate sector valuations, while DeFi could experience 4 to 5 times growth, with several protocols outperforming major cryptocurrencies. Despite facing regulatory challenges, the crypto sector is poised for a substantial re-rating in the years to come.
