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>That said, one thing that boggles my mind is the fact that it seems to be currently valued at 100B$ which is roughly the market cap of Goldman Sachs It makes

>That said, one thing that boggles my mind is the fact that it seems to be currently valued at 100B$ which is roughly the market cap of Goldman Sachs It makes more sense when you consider the insane fees they get away with charging due to lack of competition in the regulated US crypto space. In a mature exchange in the normal financial markets, one might expect to pay under 0.5bps (one bp is 1% of 1%). In overseas crypto exchanges, the fee will be around 5bps. In Coinbase, it's 20-50bps.

riffraff 6y ago
but the business volume is _much_ lower, and GS deals with an inordinate amount of more lucrative things (SPACs, IPOs, etc).
I_am_tiberius 6y ago
> lack of competition in the regulated US crypto space That's what I thought as well. People complain about monopolies but these over regulated spaces make it so difficult for startups to get going. It shouldn't be necessary for a non tangible asset company to need an angel investor that pays for tons of bureaucracy and license acquisition.
- Guthur 6y ago
  I feel we collectively misinterpret what the problem with single trader situations are. There being a monopoly is not the problem, the problems are always anti trust behaviour i.e. not co-operating with the market for improvement, closing of competition by some behaviour that is not beneficial to the market. Highly regulated markets tend to do this due the difficulty in disrupting such a market, you need to play by the existing rules and that leaves little room for manoeuvre against the incumbents, the incumbents are free from anti trust because the rules are set by the authorities, often at the behest of the incumbents of course.
TacticalCoder 6y ago
> It makes more sense when you consider the insane fees they get away with charging due to lack of competition in the regulated US crypto space. The fees, as you explain it, do indeed seem like highway robbery. But there's something very specific about Coinbase in the US: all customers funds from american fiscal residents in USD are FDIC insured (so up to 250 K are safe). AFAICT they're the only one to actually offer this? It's also a real company, with a real address, whose owners are real people, etc. It's not exactly the "we're convicted criminals operating from the Cayman using some shady bank" type of crypto exchange.
- cecida 6y ago
  Tether and their 45 billion of fully-backed assets (!) are based in the British Virgin Islands, and do their banking through a shady bank in the Bahamas.
- scsilver 6y ago
  Can you point to their claim of FDIC coverage. Brokerages usually have SIPC for securities, I figured coinbase just had privste insurance and wasnt using FDIC or SIPC. Looks like there is some details here https://www.coinbase.com/legal/insurance https://www.coinbase.com/legal/insurance
  - ac29 6y ago
    From your link: "To the extent U.S. customer funds are held as cash, they are maintained in pooled custodial accounts at one or more banks insured by the FDIC. Our custodial accounts have been established in a manner to make available pass-through FDIC insurance" So, should you have the desire to keep cash at Coinbase for some reason, it will actually be held at a real bank and FDIC insured.

riffraff 6y ago

but the business volume is _much_ lower, and GS deals with an inordinate amount of more lucrative things (SPACs, IPOs, etc).

I_am_tiberius 6y ago

> lack of competition in the regulated US crypto space That's what I thought as well. People complain about monopolies but these over regulated spaces make it so difficult for startups to get going. It shouldn't be necessary for a non tangible asset company to need an angel investor that pays for tons of bureaucracy and license acquisition.

Guthur 6y ago
I feel we collectively misinterpret what the problem with single trader situations are. There being a monopoly is not the problem, the problems are always anti trust behaviour i.e. not co-operating with the market for improvement, closing of competition by some behaviour that is not beneficial to the market. Highly regulated markets tend to do this due the difficulty in disrupting such a market, you need to play by the existing rules and that leaves little room for manoeuvre against the incumbents, the incumbents are free from anti trust because the rules are set by the authorities, often at the behest of the incumbents of course.

TacticalCoder 6y ago

> It makes more sense when you consider the insane fees they get away with charging due to lack of competition in the regulated US crypto space. The fees, as you explain it, do indeed seem like highway robbery. But there's something very specific about Coinbase in the US: all customers funds from american fiscal residents in USD are FDIC insured (so up to 250 K are safe). AFAICT they're the only one to actually offer this? It's also a real company, with a real address, whose owners are real people, etc. It's not exactly the "we're convicted criminals operating from the Cayman using some shady bank" type of crypto exchange.

cecida 6y ago
Tether and their 45 billion of fully-backed assets (!) are based in the British Virgin Islands, and do their banking through a shady bank in the Bahamas.
scsilver 6y ago
Can you point to their claim of FDIC coverage. Brokerages usually have SIPC for securities, I figured coinbase just had privste insurance and wasnt using FDIC or SIPC. Looks like there is some details here https://www.coinbase.com/legal/insurance https://www.coinbase.com/legal/insurance
- ac29 6y ago
  From your link: "To the extent U.S. customer funds are held as cash, they are maintained in pooled custodial accounts at one or more banks insured by the FDIC. Our custodial accounts have been established in a manner to make available pass-through FDIC insurance" So, should you have the desire to keep cash at Coinbase for some reason, it will actually be held at a real bank and FDIC insured.