Leaked information reveals that Coinbase is not going to go ahead with its affiliate marketing program. Market conditions and outlook for the rest of the year have been cited as reasons for the suspension. The platform is likely to resume the affiliate program in 2023.
According to Business Insider, the leaked emails stated that it wasn’t an easy decision to make and it wasn’t made lightly either. Coinbase is unable to continue supporting incentivized traffic to its platform because of the unstable crypto market conditions and the uncertain outlook for the remaining of 2022.
Some took to Twitter to say that the crypto exchange platform may be having liquidity problems. Kurt Wuckert Jr., of CoinGeek, highlighted that the suspension of the affiliate program and other decisions taken by Coinbase in the past several weeks indicates a “looming” liquidity crisis. About 50% of stablecoins – worth around $248 million – on Coinbase Pro left the exchange on July 15. The stablecoin outflow was significantly higher on Coinbase compared to other exchanges like Binance. It should be noted that only 1% of stablecoin reserves left Binance over the same period. But the tokens had a similar value – just under $300 million.
In January 2022, stablecoins peaked at $1.2 billion on Coinbase – but now it stands at just $284 million. In comparison, the value in Binance remains in an upward trend since 2019. It’s worrisome when comparing Bitcoin being held. Coinbase recorded a steady decline in Bitcoin held in its reserves.
There are some like Kraken’s Dan Held who believe that Coinbase doesn’t have a liquidity crisis. A developer also said the same – shutting down the affiliate program has nothing to do with liquidity.