Crypto trading: where are the crypto bros?

The cryptocurrencies space, subject to high price volatility, has seen traffic to top trading platforms fluctuate in line with the ups-and-downs of the price of bitcoin. For example, Coinbase’s total digital audience grew in 1H 2021 as bitcoin prices (relative to the US dollar) surged and the company went public in April 2021. The momentum petered off in the summer of the same year along with the fall of bitcoin price. After a short spike at the end of 2021, traffic to Coinbase resumed its downward trend in 2022, along with the drop in bitcoin.

However, Coinbase is not alone in seeing this drop. Top trading platforms such as Crypto.com and Gemini.com all showed sharp decreases year-to-date.

A similar pattern occurred on social media: despite cryptocurrency companies maintaining steady levels of activity since 2021 (reflected in the number of posts –see chart below), consumers have proven to be fickle: engaging with crypto brands with gusto in 2021, then reining in their enthusiasm for the better part of 2022.

The top trading platforms are also facing increased competition from relative newcomers. For example, PayPal started allowing crypto trades on PayPal.com and Venmo in 2021 with a series of marketing campaigns and incentives. In September 2022, 11.6 million online visitors visited both PayPal and Coinbase. Other top financial services companies also share a high overlap of audience with Coinbase: companies such as Cash App, Chime, or Robinhood, have all launched crypto-focused products in the past years, which might divert the traffic to trading platforms.

For now, handling increased regulatory scrutiny is likely to be the main focus of crypto trading platforms. In time, finding ways to appeal to a broader audience will soon matter too. On that front, a comparison of Coinbase and PayPal personas revealed that PayPal appeals to a large range of personas (see chart below). For Coinbase however, only ‘savvy investors’ have high affinity scores. This indicates that transparency, clear regulations, and integration with day-to-day financial tools will be key for the crypto industry to gain mass appeal.