Coinbase Loses Market Share in Ether Staking as Regulatory Pressure Mounts

Bitget App

Trade smarter

Bitget

News

Markets

Coinbase Loses Market Share in Ether Staking as Regulatory Pressure Mounts

Coindesk2023/06/27 14:01

By:Krisztian Sandor

The exchange’s share in ETH staking dropped to 9.7%, the lowest since May 2021. The SEC sued the company in June for offering unregistered securities.

Crypto exchange has lost market share in the booming ether () staking business as mounting pressure from U.S. regulators weighs on its staking service.

The exchange’s share in ETH staking slipped to 9.7%, the lowest level since May 2021, according to a by digital asset investment product-issuer . This is a significant drop from the 13.6% recorded on April 12, when Ethereum’s allowed withdrawals for the first time.

The downturn has happened as the demand for – locking up tokens to participate in securing the blockchain while earning a passive income on holdings – . The Shanghai upgrade unleashed a wave of deposits to staking, with inflows outpacing withdrawals by some , worth $7.3 billion at curren t prices.

Coinbase, however, suffered a net outflow of $517 million (272,315 ETH) during the same period, the second-largest amount after rival crypto exchange Kraken.

“A potential reason could be that investors do not want to be exposed to regulatory risk by using Coinbase’s staking services,” Tom Wan, analyst at 21Shares, told CoinDesk in a note.

Kraken was by the U.S. Securities and Exchange Commission () earlier this year and shuttered its service for U.S. customers as part of a settlement with the agency.

On June 6, the SEC also a lawsuit against Coinbase for violating federal securities laws, including offering to users with its staking service. However, the exchange said it remained committed to .

Since the lawsuit, Coinbase has withdrawn some 149,300 ETH from Ethereum’s network, while depositing only 52,992 tokens, compiled by 21Shares shows. The $183 million net outflow indicates that users were unstaking tokens and fleeing the exchange.

Coinbase still held its position as the second largest staking service provider, but fast-growing rivals such as Figment, RocketPool and Kiln have been closing the gap, a shows.

The exchange takes a on user rewards earned by staking, so a decrease in the amount of staked tokens means less revenue.

Edited by James Rubin.

162

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.

APR up to 10%. Always on, always get airdrop.

Lock now!

Ethena, Hyperliquid, and ONDO stand out in this cycle as high-conviction projects with exceptionally strong product-market fit (PMF). Ethena centers around its innovative stablecoin protocol, USDe. Through dynamic strategy adjustments and efficient capital utilization, it offers both high yield and stability. With over $1.3 billion in circulation, it reflects strong and growing market demand. Hyperliquid focuses on decentralized derivatives trading. Built on a high-performance L1 and powered by user-driven strategy optimization, it has seen a surge in trading volume. This showcases explosive ecosystem growth and has gained traction from both institutional and retail participants. ONDO bridges traditional finance and DeFi by tokenizing real-world assets (RWA), such as U.S. Treasuries. It meets the growing investor demand for low-risk, high-liquidity products, and its market recognition is rapidly accelerating. Each of these projects addresses a key pain point in its vertical: Ethena delivers yield stability, Hyperliquid boosts trading efficiency, and ONDO connects TradFi to DeFi through RWA. Together, they represent a combination of technological innovation and strong market traction. Looking ahead to 2025, macro conditions — from low volatility to policy tailwinds — further support their continued growth, positioning them as standout investment opportunities in this cycle.

Bitget VIP•2025/05/23 04:00