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I would argue the biggest threat to coinbase is another crypto winter where volumes fall by 90%! And eventually the asset class becoming mature, so fees also fa
by gbasin 6y ago
I would argue the biggest threat to coinbase is another crypto winter where volumes fall by 90%! And eventually the asset class becoming mature, so fees also fall by another 90%
- gruez 6y ago>And eventually the asset class becoming mature, so fees also fall by another 90% Are we talking fees for coinbase pro, or the spot price offered by coinbase on their website? The prices for the former are already pretty low, with most exchanges charging around 0.2% on their lowest volume tier. The prices for the latter might be high, but I can totally imagine it staying high considering that forex rates at your local bank is equally as bad (around 1-2%). As a point of comparison for both, transferwise charges 0.4% for converting euro to usd.
- gbasin 6y agoThe fees. 0.2% is not low compared to any mature market for trading. As a point of reference, Robinhood is free. Interactive Brokers will charge you a fraction of a cent in commissions, so on a $30 stocks that's about 0.01%
- mandelbrotwurst 6y agoSure, although you are comparing the rate to that of stock trades while the person you’re replying to is comparing to currency exchanges.
- gruez 6y agoStock trading is cheap for a variety of factors that's not applicable to crypto (eg. payment for order flow, stock lending [1]). A stock brokerage can also skimp on security because the legacy financial system has an undo button for oopsies. Finally, a 0.2% fee is relatively competitive with a "reasonable" commission of $5-10/trade (the going rate before brokerages became commission-free) as long the trade is below a few thousand dollars. [1] https://news.ycombinator.com/item?id=20276551 https://news.ycombinator.com/item?id=20276551
- deleted 6y ago[deleted]
- mquander 6y agoWhy will those factors not be applicable to crypto? (People taking custody of their own cryptoassets may mean that the exchange can't lend them out, but as exchanges continue to pass the test of time more and more people may be willing to leave assets on exchanges.)
- gruez 6y agoAFAIK the only reason why there's a market for lending stocks is because the SEC prohibits naked short-selling. If you want to short-sell, you need to locate a share somewhere and "borrow" it, which leads to brokerages offering to do that for a price. For crypto this isn't required because you can short using CME bitcoin futures, which is cash settled and therefore doesn't require you to locate/borrow anything.
- dannyw 6y agoFor non-cash-settled transactions there is still a desire to borrow crypto. For example, pledging bitcoin to borrow ETH to purchase a NFT.
- anonymoushn 6y agoOn crypto venues you can spot borrow crypto but there you're right that there is not much demand for this, and as a result lenders don't get paid much.
- mancerayder 6y agoDidn't Coinbase already survive that 2 years ago?
- hanniabu 6y agoYes, and before that.
- geniium 6y agoThat’s what we call a strong correction. Or even a « capitulation ». It’s pretty healthy if u ask me. Market cycles. It will happen again. The question is when? After what BTCUSD price? We’ll probably run the bull a few more months and then crash. And then start all again.