Coinbase's COIN price experienced a dip below the $200 mark on May 16, despite the overall bullish trend in the market. This development comes as the company solidifies its position as a leading player in the US crypto space, with numerous ETF providers, including BlackRock, entrusting it with the custody of their Bitcoin exchange-traded funds.

The price drop may be attributed to the increasing competition in the local market. Coinbase, led by Brian Armstrong, has established a monopoly on the Bitcoin ETF custody front, being one of the few publicly traded crypto exchanges in the US. This dominance has contributed to its impressive 72% revenue increase in the first quarter of 2024, with its shares surging from $156 to $280 at the end of March.

However, the COIN price began to decline in April and May, despite maintaining a healthy level above $200. This downward trend continued with a 9.43% drop on May 16, resulting in a price of $199. The primary reason for this decline is not directly related to market movements, as Bitcoin experienced a surge above $66,500, its highest level in three weeks.

The upcoming competition on the spot trade front in the US, particularly with the CME Group's plans to offer spot Bitcoin trading services, may have contributed to the decline. As a well-established player in traditional finance and the crypto space, CME's potential launch could potentially erode market share from dominant forces like Coinbase and Binance. Furthermore, Cathie Wood's Ark Invest has been gradually disposing of COIN shares, increasing the selling pressure and contributing to the decline in Coinbase's price.