According to @ThinkingUSD on Twitter, a significant portion of revenue for crypto trading desks comes from liquidations, similar to the High Leverage Program (HLP). Many major exchanges now have specialized liquidation programs where market makers (MMs) take the opposite side of liquidated trades. However, exchanges themselves continue to profit substantially from handling liquidation flow directly. For traders, understanding the structure of these liquidation programs is crucial, as it affects liquidity, volatility, and overall trading risk. These mechanisms directly impact crypto market dynamics and should be factored into trading strategies (Source: @ThinkingUSD, May 30, 2025).

According to Milk Road, Coinbase ($COIN) disappointed Wall Street as Q1 2025 revenue fell about 13% from $2.3 billion in Q4 2024 to $2 billion, primarily due to a broad decline in crypto trading volume (source: Milk Road, May 9, 2025). Net income also dropped 95%, reflecting reduced transaction activity. These results signal waning retail and institutional crypto engagement, suggesting traders may see continued short-term pressure on crypto exchange stocks. The lower trading volume could impact liquidity and volatility across major cryptocurrencies, influencing both spot and derivatives markets.