Coinbase has increased the amount low volume traders pay while decreasing the amount high volume traders pay. Additionally, they’ve made the highly questionable move of removing stop orders from their trading service.
First, no matter how they try to frame it, they’re trying to make more money. The majority of their traders are low volume traders so this is effectively just a raise of trading fees.
You can see Coinbase’s new fee structure here.
Second, this will likely please their high volume traders and possibly draw in more whales for Coinbase. This is good for Coinbase, but not necessarily so good for the average user.
I’d just like to point out that this is the latest in a string of bad decisions Coinbase has recently made. They previously attempted to make a deal with a sketchy spyware company.
A year before, they botched their bitcoin cash rollout. They released bitcoin cash with very little warning.
Initially they said trading of bitcoin cash wouldn’t be allowed on their platform.
Overall this is starting to show an alarming pattern of putting their company’s greed over the needs of the customer.
Historically this doesn’t end well in business.
I believe Coinbase are shooting themselves in the foot, making moves that will get short term money at the cost of long-term gains.
Take this example:
Let’s say I’m a day trader on Coinbase and I hear about the fee change. I make a lot of trades but am by no means a whale.
This change will increase the amount I pay in fees by 50%.
I have a choice: A. I can pay the extra 50%. B. I can switch to Binance, which has lower fees and exponentially more coins.
What do you think I’ll choose?
The answer is B., as will most people. I believe there’s a serious risk this will lead to a small exodus of people from Coinbase to Binance.
This will of course cost Coinbase much more money than they gain from the fee increase.
Overall, Coinbase has not lately been showing the vision and discipline needed for a company of their size.
Hopefully that changes.
Coinbase needs a slogan like Google’s former “Don’t Be Evil”. They need a simple sentence with which to identify their mission.
Because lately it seems they’ve drifted off the path.
Will Salisbury is the co-founder of Blockchain Decrypted and full-time cryptocurrency trader. He also hosts the Blockchain Decrypted podcast, and when he's not talking or writing about blockchain technology and cryptos, he likes to play games and relax in his home state of Michigan.
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