Coinbase App Downloads Drop 50% – Attacks to Blame?

Reading Time: 2 minutes
  • Centralized crypto exchanges that have security issues and poor customer service drive away potential users.
  • Downloads of the Coinbase app have dropped by 50% in Q3 2021.
  • Coinbase has acknowledged that recent phishing attacks have drained funds from over 6,000 accounts.

Potential investors are considerably less interested in centralized crypto trading platforms, particularly when it comes to Coinbase.

In a recent blog post, Coinbase, the leading crypto exchange in the US, acknowledged that phishing attacks have drained funds from over 6,000 accounts. This along with the company’s historic poor customer service reputation and a plateaued crypto market has driven away new customers from Coinbase.

As of now, downloads of the Coinbase app have dropped dramatically, dipping by approximately 50% during the third quarter of this year.

Coinbase Stock to be Adversely Affected

Coinbase shares, which are currently trading at around $231 per cut, might get adversely affected as Coinbase fails to onboard new users.

At its peak, shares of Coinbase managed to reach a record new level at around $342 just two days after the company went public. However, following the crypto market crash in May, Coinbase shares also experienced a slump. Ever since, Coinbase stocks have been constantly dropping as the crypto market struggles to recover.

As of now, Coinbase stock is down by around 30% compared to peaks at mid-April. Arguably, a strong crypto market resurgence can compensate for Coinbase’s declining user base. However, if the crypto summer doldrums prove to persist, Coinbase shares would hit the most.

Moreover, with crypto adoption soaring and more users averting from Coinbase, the opportunity for other competitors elevates. In fact, this is why there is exceptional demand for Bitcoin ETFs. Ostensibly, a number of institutional investors want to get exposure to crypto, but they don’t favor crypto exchanges.

Over 6,000 Coinbase Accounts Hacked

The news of Coinbase users getting attacked started circulating back in August, but the extent of it has only been revealed recently after the company started sending a letter to affected customers.

In the letter, the company said that “at least 6,000 Coinbase customers had funds removed from their accounts.” Nevertheless, Coinbase has asserted that it would reimburse those affected as a result of the phishing attack. The crypto exchange did not disclose the cumulative sum of the stolen money.

Coinbase to Launch a 24/7 Phone Line

Coinbase earned a valuation of around $100 billion when it went public in mid-April this year, becoming on a par with the likes of Goldman Sachs. However, despite all the scaling, Coinbase has one of the worst customer services.

Coinbase, the largest and most popular crypto exchange in the US, doesn’t even have a working phone number. In times of trouble, a user can wade through perplexing help pages, or ping an email for an automated response. Other than these, there is very little to do.

Addressing these issues, Coinbase has announced that it will take new measures to improve its customer services. The company aims to increase email response times as well as adding a phone line. Coinbase said in a recent blog post:

Direct connections matter, so 24/7 phone support will be available for all retail customers who prefer speaking live with an expert. Whether the question is simple or complex, customers in the US, UK, Germany, and Japan will have the option to connect with our in-country based customer service teams before the end of 2021 with further expansion planned for 2022.