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Their growth rate is staggering, and they are enormously profitable. I was most stunned by the gross margins. They spend so little to make so much. It illustrat

by ttul 6y ago

Their growth rate is staggering, and they are enormously profitable. I was most stunned by the gross margins. They spend so little to make so much. It illustrates how feverish the crypto investing world is.

atomicnumber3 6y ago
I worked for a prop firm that briefly did a foray into coin trading. Coinbase's trading fees are *outrageous** compared to what we're used to in the world of normal equity/option/future/fx trading. Literally 100x+ what we're used to paying. You have to do absolutely enormous volume before they'll give you anywhere near a sane rate. I'm not surprised they're printing money.
- baby 6y ago
  Yeah their rates are outrageous.
- ayewo 6y ago
  > Coinbase's trading fees are outrageous compared to what we're used to in the world of normal equity/option/future/fx trading. I'm guessing their fees draw heavy inspiration from price skimming [0] (which is used heavily by AWS), as it allows them to maximize revenue while consumer demand is high in cryptocurrencies. 0: https://www.investopedia.com/terms/p/priceskimming.asp https://www.investopedia.com/terms/p/priceskimming.asp
- gbillz 6y ago
  Or you could just go to Coinbase pro and log in with the same credentials and pay a tiny fraction of the usual fees. No setup or form to fill out. You can transact small amounts as well.
  - askmike 6y ago
    He might have been referring to the fees of coinbase pro, which also are pretty high fees (but orders of magnitude smaller than the coinbase retail app). Pretty high for crypto, insane for people coming from fx or other traditional markets.
  - smabie 6y ago
    Still egregious (and no derivs) compared to large Asian exchanges. No real trading firm wants to trade on CB right now.
- Workaholic_87 6y ago
  With wall street and other large players steadily moving into crypto, I don't suspect Coinbase will be able to continue to charge their high trading fees....and thus their margins will drop dramatically. Would be careful of jumping on this guy, and presuming it's success will fall in line as the latest on the tech IPO bandwangon
  - smabie 6y ago
    most prop firms are not trading on CB. It's spot only (yuck) and yes, the fees are awful. I'm pretty bearish on CB and incredibly bullish on FTX. SBF could very well be the richest man on earth in 5 years.
baby 6y ago
It might also illustrate how little workforce you need to integrate with many crypto networks.
hntrader 6y ago
It also illustrates the lack of competition due to US regulations preventing foreign exchanges (many of them signficiantly larger and cheaper than Coinbase) from serving US customers. Very few people outside the US trade on Coinbase because they have monopoly margins.
- yao420 6y ago
  I’m starting to feel this is a positive and all countries should do this. I know China gets a lot of flack for doing the same thing but maybe they are right? Better to have a local company do well and contribute to the local economy than to send profits overseas and be subject to global corps.
  - garmaine 6y ago
    It’s not better for you or me, who are forced to pay those rates.
  - dcolkitt 6y ago
    Disagree. But much better for domestic consumers to get the best prices and highest quality. I don't care if a Chinese or American magnate becomes a billionaire. I care that millions of middle-class Americans get the best deal possible.
    - xwolfi 6y ago
      Well I'm in China myself and while I agree I think it might not produce the effect you want. First, ideologies and absolute rules dont work because as soon as you know them, you work to bypass them to your advantage. With that in mind, what do you think of the current situation? The US maximize price based optimization (get the best deal) while China maximize population occupancy (everyone must work, nobody is educated = low salary, high industrial out, low output price - one might say to make its population calmer, or simply because for them being busy > getting the best deal). You then have the largest oldest country in the world trending toward mass slavery reducing prices for the richest most abstract country trending towards 0 productivity in exact opposite. What is the end game? All americans, getting everything for free losing the ability to build anything while all Chinese work at their own health cost to provide the best prices while being the only ones able to produce anything ? I think a more balanced local mini supply chain would help both countries and Im glad it s heavily discussed all over the world (decoupling from China, Chinese industries realizing their Chinese employees are now their best clients)

by ttul 6y ago

atomicnumber3 6y ago

I worked for a prop firm that briefly did a foray into coin trading. Coinbase's trading fees are *outrageous** compared to what we're used to in the world of normal equity/option/future/fx trading. Literally 100x+ what we're used to paying. You have to do absolutely enormous volume before they'll give you anywhere near a sane rate. I'm not surprised they're printing money.

baby 6y ago
Yeah their rates are outrageous.
ayewo 6y ago
> Coinbase's trading fees are outrageous compared to what we're used to in the world of normal equity/option/future/fx trading. I'm guessing their fees draw heavy inspiration from price skimming [0] (which is used heavily by AWS), as it allows them to maximize revenue while consumer demand is high in cryptocurrencies. 0: https://www.investopedia.com/terms/p/priceskimming.asp https://www.investopedia.com/terms/p/priceskimming.asp
gbillz 6y ago
Or you could just go to Coinbase pro and log in with the same credentials and pay a tiny fraction of the usual fees. No setup or form to fill out. You can transact small amounts as well.
- askmike 6y ago
  He might have been referring to the fees of coinbase pro, which also are pretty high fees (but orders of magnitude smaller than the coinbase retail app). Pretty high for crypto, insane for people coming from fx or other traditional markets.
- smabie 6y ago
  Still egregious (and no derivs) compared to large Asian exchanges. No real trading firm wants to trade on CB right now.
Workaholic_87 6y ago
With wall street and other large players steadily moving into crypto, I don't suspect Coinbase will be able to continue to charge their high trading fees....and thus their margins will drop dramatically. Would be careful of jumping on this guy, and presuming it's success will fall in line as the latest on the tech IPO bandwangon
- smabie 6y ago
  most prop firms are not trading on CB. It's spot only (yuck) and yes, the fees are awful. I'm pretty bearish on CB and incredibly bullish on FTX. SBF could very well be the richest man on earth in 5 years.

baby 6y ago

It might also illustrate how little workforce you need to integrate with many crypto networks.

hntrader 6y ago

It also illustrates the lack of competition due to US regulations preventing foreign exchanges (many of them signficiantly larger and cheaper than Coinbase) from serving US customers. Very few people outside the US trade on Coinbase because they have monopoly margins.

yao420 6y ago
I’m starting to feel this is a positive and all countries should do this. I know China gets a lot of flack for doing the same thing but maybe they are right? Better to have a local company do well and contribute to the local economy than to send profits overseas and be subject to global corps.
- garmaine 6y ago
  It’s not better for you or me, who are forced to pay those rates.
- dcolkitt 6y ago
  Disagree. But much better for domestic consumers to get the best prices and highest quality. I don't care if a Chinese or American magnate becomes a billionaire. I care that millions of middle-class Americans get the best deal possible.
  - xwolfi 6y ago
    Well I'm in China myself and while I agree I think it might not produce the effect you want. First, ideologies and absolute rules dont work because as soon as you know them, you work to bypass them to your advantage. With that in mind, what do you think of the current situation? The US maximize price based optimization (get the best deal) while China maximize population occupancy (everyone must work, nobody is educated = low salary, high industrial out, low output price - one might say to make its population calmer, or simply because for them being busy > getting the best deal). You then have the largest oldest country in the world trending toward mass slavery reducing prices for the richest most abstract country trending towards 0 productivity in exact opposite. What is the end game? All americans, getting everything for free losing the ability to build anything while all Chinese work at their own health cost to provide the best prices while being the only ones able to produce anything ? I think a more balanced local mini supply chain would help both countries and Im glad it s heavily discussed all over the world (decoupling from China, Chinese industries realizing their Chinese employees are now their best clients)