Half of Bitcoin holders on the Coinbase exchange could face losses, says Mizuho

About half of Bitcoin holders who use Coinbase as an exchange are likely to face losses after the largest cryptocurrency fell to $20,834 late Monday, its lowest level since December 2020, according to analysts at Mizuho.

bitcoin BTCUSD,
is trading at around $21,523, according to CoinDesk data, down 6% over the past 24 hours and almost 70% below its all-time high set in November.

A Mizuho survey has determined the average cost basis for Bitcoin holders on Coinbase COIN,
at $21,000 based on a survey of 145 customers on the exchange. If the cryptocurrency falls below this number, they estimate that about half of the holders surveyed would experience losses.

According to data from Glassnode, Bitcoin has fallen below its current realized price of $23,430. The metric represents the average price of each bitcoin offered, valued at the time of the last issuance on the blockchain.

Bitcoin has rarely fallen below its realized price “outside the deepest and last stages of bear markets,” Glassnode analysts wrote in a note Tuesday. The last times it fell below these levels were in March 2020 and at the end of the 2018-2019 bear market.

Meanwhile, Coinbase is estimated to have recorded a total crypto trading volume of $220 billion for the second quarter, well below the volume of $309 billion in the first quarter, analysts at Mizuho wrote in a note Tuesday.

They estimated the average daily trading volume on Coinbase at $1.7 Billions from June 1st to June 11th. If recent weakness continues through the end of the year, the company’s total volume in 2022 would be about $836 billion, which could translate to revenue of $3 billion, or 30% below the current consensus, analysts at Mizuho wrote .

Additionally, Coinbase said on Tuesday that it would cut 18% of its workforce. According to the analysts, this could hamper the company’s efforts to find new revenue streams as Coinbase faces increasing competition. Half of Bitcoin holders on the Coinbase exchange could face losses, says Mizuho

Brian Lowry

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