Traffic to Coinbase Hints at Earnings Challenges

When Coinbase next reports its earnings on May 10, we will be watching to see how softness in its traffic, new account signup, and app install numbers are reflected in the results.

Key Takeaways

1. Desktop and mobile web traffic to coinbase.com was down 25.6%, year over year, in Q1 of 2021, according to Similarweb estimates.
2. Coinbase Mobile app installs are also trending down. Unique installs on Android dropped 67% from April 2021, when they totaled nearly 2.2 million, to about 714,000 in March 2022.
3. Desktop and mobile web traffic to Coinbase’s new account signups page was down from within the U.S. – despite Coinbase’s participation in the “Crypto Bowl” of advertising at American football’s Super Bowl.
4. The company says its revenue and earnings tend to track the rise and fall of cryptocurrencies in general and Bitcoin in particular. When Bitcoin was booming in the fall, Coinbase traffic and app installs were also up. Now that Bitcoin is in a slump, website traffic and app installs are also slumping.

Overview

When Coinbase next reports its earnings on May 10, we will be watching to see how softness in its traffic, new account signup, and app install numbers are reflected in the results.

Coinbase is the leading cryptocurrency exchange in the U.S. and one of the leaders worldwide. It has the reputation of being a good place for new crypto investors to start, with relatively easy-to-use tools for buying, selling, and managing crypto assets. Desktop and mobile web visits are one of the main ways it attracts and signs up new customers, although regular users often shift some of their activity to Coinbase’s mobile apps, using the website more for research.

Analysts and investors who are bullish on the company tend to point to its opportunities to expand by adding support for additional crypto products such as NFTs, those digital certificates of bragging rights to Bored Apes and other crypto assets. Skeptics, however, note that Coinbase has yet to move its NFT product beyond beta launch (which just happened in late April) and that the NFT business may evaporate before Coinbase enters that market. They also point to other ongoing worries about regulations and lawsuits that affect the entire crypto industry.

In the company’s annual report for 2021, management pointed to dependence on earning “substantially all of our net revenue” from transaction fees on trades as one of the company’s major risk factors, with revenue “directly correlated” with trading volume in particular. In a selloff, Coinbase still earns transaction fees, but those fees decline with the price of the assets being traded. Worse, as the Wall Street Journal recently reported, Coinbase and other crypto stocks have been performing worse than the price of cryptocurrencies themselves. This undercuts the argument some pundits have put forward that investing in a stock like Coinbase is a way to capture the upside of interest in crypto without the need to master all of the complexities. Whatever the merits of that argument, Coinbase investors are learning they aren’t insulated from the downside when cryptocurrency values decline.

Web Traffic is Down

Worldwide desktop and mobile web traffic to coinbase.com was down 25.6% year over year in Q1 2022.

We see a similar trend with installs of Coinbase’s apps (more so for the trading app than its Coinbase wallet), according to Similarweb estimates based on data for Android.

These trends aren’t surprising, given that interest in crypto tends to rise and fall with the price of Bitcoin and other digital currencies. After approaching a price of $68,000 USD in November, Bitcoin has been trading in the range of $35,000 to $47,000 in recent months, according to CoinMarketCap. Similarly, Ethereum has dropped from its November high of over $4,600 into the neighborhood of $3,000.

Softness in Signup Traffic (Despite a Super Bowl Ad)

In the U.S., where Coinbase is the leading cryptocurrency exchange, desktop and mobile web traffic to coinbase.com was down 23.6%, year over year in the first quarter, and traffic to the signup page of the website was down 31.9%.

Coinbase saw a drop in signup page traffic despite spending big (reportedly, about $14 million) on a Super Bowl ad that featured a bouncing QR code. The code drove people to a landing page where they could enter sweepstakes and get free bitcoin upon creating an account. On a percentage basis, FTX seems to have gotten a bigger immediate gain in traffic from its ad featuring a time-traveling Larry David as a skeptic of every innovation in history, including crypto.

Coinbase attracted about 394,257 visits to the drops.coinbase.com sub-domain it set up specifically for new signups related to its QR code Super Bowl ad. Those who scanned the code were sent straight to that landing page. The web address also flashed briefly on the screen at the end of the ad. We will be interested to see what Coinbase discloses about how many of those visitors they converted into account holders – and how many of those people did more than collect their allotment of free crypto.

The overall level of traffic coinbase.com attracted that day (more than 1 million visits and 6 million page views, according to Similarweb estimates) was less than some other days in the preceding month. At the same time, the burst of traffic during the game was enough to “crash” the website (or, at least, cause significant slowdowns). Coinbase said the website saw 20 million “hits” in a single minute (perhaps including multiple requests from those having trouble getting the site to load).

A Leader in the U.S., a Contender Worldwide

Coinbase is the traffic leader among crypto-focused trading services in the U.S.

However, Binance leads worldwide on the basis of binance.com alone and also operates localized domains like binance.us. In March, binance.com attracted nearly 114 million visits, double the traffic to coinbase.com.

If we include services that support crypto side-by-side with other types of investments, Coinbase also ranks behind eToro worldwide.

By that same standard, Coinbase ranks behind robinhood.com in the U.S., with robinhood.com seeing 32 million monthly visits compared to 30 million for coinbase.com in March.

Conclusion

Coinbase is suffering along with the price of Bitcoin and other cryptocurrencies and can be expected to recover to the extent that leading cryptocurrencies recover – or crater further, along with them. Going forward, the company faces the challenge of diversifying into new applications of the blockchain technology that undergirds crypto, meaning NFTs and whatever comes next… this while fending off competition from the broader market that includes investment services like Robinhood.

The Similarweb Insights Newsroom is available to pull additional or updated data on request for the news media (journalists are invited to write to press@similarweb.com). When citing our data, please reference Similarweb as the source and link back to the most relevant blog post or similarweb.com/blog/insights/.

Contact: For more information, please contact David F. Carr at david.carr@similarweb.com

Data

Methodology

Disclaimer:

All data, reports and other materials provided or made available by Similarweb are based on data obtained from third parties, including estimations and extrapolations based on such data. Similarweb shall not be responsible for the accuracy of the materials and shall have no liability for any decision by any third party based in whole or in part on the materials.