5 ms·

How in the world is Coinbase losing THAT much money? Isn't the product mature and fully-featured already?

stickfigure 4y ago
I was wondering this myself and it looks like they were +$3B profitable in 2021? A wild ride but it doesn't necessarily sound fatal.
- grey-area 4y ago
  Those times will never come again.
  - nwiswell 4y ago
    I said the same thing after the wild times in 2017. Frankly I don't think anyone actually knows.
    - rippercushions 4y ago
      2021 saw Hollywood A-listers pitching crypto in Super Bowl ads. It's going to take a long, long time for crypto mania to reach a similar peak again.
      - nwiswell 4y ago
        What strikes me as odd is that Bitcoin only topped out at ~3x what it did in 2017. How much do Super Bowl ads actually matter? Is frivolous advertising the ultimate metric for financial froth? Or are ads like that just a symptom of macroeconomic conditions? Is it an accident that conditions were accommodative in 2017, but even moreso in 2021? I think macroeconomics are more likely to determine meme-asset prices in the coming years than any other factor. If there's more monetary tightening ahead it's gonna be tough times for crypto, but I'm not yet convinced that we've separated from zero-rate policies for the long haul. There's some signs that inflation may not be so tenacious and that a recession is on the way, which could cause another rate U-turn pretty quick. Recessions are very bad news for risk assets (and doubly so for meme-assets, presumably), but recessions aren't nearly as sticky as monetary policy tends to be. So I can certainly see a future where in late 2024 we have a strengthening/recovering economy, very accommodative monetary policy, and... another block halving. Plus Bitcoin is a global asset, so there's the question on what goes on at a global macro level as well. On the other hand, Bitcoin retains a much smaller share of the total crypto market value than it has historically. Since Bitcoin is... "slightly less disreputable" than other cryptocurrencies... that suggests that the speculators have not yet rotated out of the riskiest crypto assets. Anyway: we will see. I don't trust anyone who is confident they know what's coming next.
      - mejutoco 4y ago
        I was a bit surprised to see crypto.com ads in Qatar football world cup these weeks.
        Hamuko 4y ago
        I've so far been assuming that these deals were paid out long before the current crash.
  - deleted 4y ago
    [deleted]
  - SentientAtom 4y ago
ttul 4y ago
I think it was Matt Levine (Bloomberg) who wrote recently that, if crypto is so amazing and efficient, why are the trading fees 100x higher than on regulated exchanges in the boring old world of traditional finance? Turns out, there are enormous costs in managing the risks inherent in moving value in and out of various cryptocurrencies.
- FabHK 4y ago
  I noted that a while ago, but as most financial insights, Levine probably write about it earlier. https://news.ycombinator.com/item?id=26813222 https://news.ycombinator.com/item?id=26813222
- anonymoushn 4y ago
  Can we compare like with like? At gate.io you can have the same access to the matching engine and market data as anyone else for free. At NYSE this costs literally millions of dollars per year. At gate.io a retail trader can place a standing limit order and a other retail trader can interact with it, and this is structurally impossible in US equities because US equities has built up an extremely costly infrastructure around extracting profit from retail traders while pretending that this is good for them by publishing papers calculating how much price improvement they received compared to lit venues where there is no retail taker flow. Commissionless stock trading generally costs customers more than commissions did. At gate and a few other venues, spot fees are 0 due to recent competition over this sort of thing. I don't endorse depositing at any particular centralized crypto exchange. They might steal your money. The London Mercantile Exchange might also do that[0]. [0]: https://finance.yahoo.com/news/analysis-turbulence-still-haunts-lme-170635542.html https://finance.yahoo.com/news/analysis-turbulence-still-hau...
  - hiq 4y ago
    > At gate.io you can have the same access to the matching engine and market data as anyone else for free. At NYSE this costs literally millions of dollars per year. It's not an apple-to-apple comparison because you can't trade the same products. It doesn't matter if a broker has the best features and the cheapest fees if it doesn't allow its users to trade what the majority of investors want to trade: regular stocks, ETFs, basically traditional financial instruments. The same reasoning can be used for most blockchain products that seem to have an edge over the traditional solutions: they mostly exist in some virtual world, but once they try to connect with traditional finance and go through the corresponding legal hoops, they end up with a worse solution than what already exists.

I was wondering this myself and it looks like they were +$3B profitable in 2021? A wild ride but it doesn't necessarily sound fatal.

grey-area 4y ago
Those times will never come again.
- nwiswell 4y ago
  I said the same thing after the wild times in 2017. Frankly I don't think anyone actually knows.
  - rippercushions 4y ago
    2021 saw Hollywood A-listers pitching crypto in Super Bowl ads. It's going to take a long, long time for crypto mania to reach a similar peak again.
    - nwiswell 4y ago
      What strikes me as odd is that Bitcoin only topped out at ~3x what it did in 2017. How much do Super Bowl ads actually matter? Is frivolous advertising the ultimate metric for financial froth? Or are ads like that just a symptom of macroeconomic conditions? Is it an accident that conditions were accommodative in 2017, but even moreso in 2021? I think macroeconomics are more likely to determine meme-asset prices in the coming years than any other factor. If there's more monetary tightening ahead it's gonna be tough times for crypto, but I'm not yet convinced that we've separated from zero-rate policies for the long haul. There's some signs that inflation may not be so tenacious and that a recession is on the way, which could cause another rate U-turn pretty quick. Recessions are very bad news for risk assets (and doubly so for meme-assets, presumably), but recessions aren't nearly as sticky as monetary policy tends to be. So I can certainly see a future where in late 2024 we have a strengthening/recovering economy, very accommodative monetary policy, and... another block halving. Plus Bitcoin is a global asset, so there's the question on what goes on at a global macro level as well. On the other hand, Bitcoin retains a much smaller share of the total crypto market value than it has historically. Since Bitcoin is... "slightly less disreputable" than other cryptocurrencies... that suggests that the speculators have not yet rotated out of the riskiest crypto assets. Anyway: we will see. I don't trust anyone who is confident they know what's coming next.
    - mejutoco 4y ago
      I was a bit surprised to see crypto.com ads in Qatar football world cup these weeks.
      - Hamuko 4y ago
        I've so far been assuming that these deals were paid out long before the current crash.
- deleted 4y ago
  [deleted]
- SentientAtom 4y ago

ttul 4y ago

I think it was Matt Levine (Bloomberg) who wrote recently that, if crypto is so amazing and efficient, why are the trading fees 100x higher than on regulated exchanges in the boring old world of traditional finance? Turns out, there are enormous costs in managing the risks inherent in moving value in and out of various cryptocurrencies.

FabHK 4y ago
I noted that a while ago, but as most financial insights, Levine probably write about it earlier. https://news.ycombinator.com/item?id=26813222 https://news.ycombinator.com/item?id=26813222
anonymoushn 4y ago
Can we compare like with like? At gate.io you can have the same access to the matching engine and market data as anyone else for free. At NYSE this costs literally millions of dollars per year. At gate.io a retail trader can place a standing limit order and a other retail trader can interact with it, and this is structurally impossible in US equities because US equities has built up an extremely costly infrastructure around extracting profit from retail traders while pretending that this is good for them by publishing papers calculating how much price improvement they received compared to lit venues where there is no retail taker flow. Commissionless stock trading generally costs customers more than commissions did. At gate and a few other venues, spot fees are 0 due to recent competition over this sort of thing. I don't endorse depositing at any particular centralized crypto exchange. They might steal your money. The London Mercantile Exchange might also do that[0]. [0]: https://finance.yahoo.com/news/analysis-turbulence-still-haunts-lme-170635542.html https://finance.yahoo.com/news/analysis-turbulence-still-hau...
- hiq 4y ago
  > At gate.io you can have the same access to the matching engine and market data as anyone else for free. At NYSE this costs literally millions of dollars per year. It's not an apple-to-apple comparison because you can't trade the same products. It doesn't matter if a broker has the best features and the cheapest fees if it doesn't allow its users to trade what the majority of investors want to trade: regular stocks, ETFs, basically traditional financial instruments. The same reasoning can be used for most blockchain products that seem to have an edge over the traditional solutions: they mostly exist in some virtual world, but once they try to connect with traditional finance and go through the corresponding legal hoops, they end up with a worse solution than what already exists.