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.
The latter is largely due to regulatory capture, US customers being banned from Asian exchanges due to US regulations. Almost nobody outside the US actually prefers Coinbase, the fees and liquidity is just much worse. The volumes on Binance speak for itself.
Not to mention Coinbase is only a medium size player outside the US. Binance is the biggest exchange in the world. No one outside US uses Coinbase, it’s fees are ridiculous.
I think the point is that coinbase is struggling to compete when there are tons of exchanges out there offering low/no fees and ludicrous interest payments on coins kept on the exchange. Even if those other 'exchanges' do all seem to be turning out to be ponzi schemes... For whatever reason people keep flocking to the next one.
"whatever it is, it is higher than non US based exchanges".
Riiight, because nowhere except the US imposes financial regulations. Hey remember that time Europe existed?
What sets Coinbase apart right now is not what country they happen to be in, it's that they've sought extra levels of conformity with their local authorities. If Bitstamp were to register with the British Financial Conduct Authority for example, people would have a lot more confidence.
Lets not be so arrogant to imply that bitcoins future rests on the US market.
As mentioned, Coinbase is not an exchange and honestly leaves much to be desired (limited instant buys, for example).
I think the better reason is that allowing any single Bitcoin trading company to get too big is unhealthy (see MtGox). Having competing companies is very much in the interest of the btc community.
There aren't many compliant exchanges operating in the US, though; Coinbase seriously even raised their fees a couple years ago because they thought they could do so, even while other exchanges are trying to lower them: they aren't merely competing on fees.
US deregulation would. Coinbase has a captive market. US customers would love to use one of the many much cheaper foreign exchanges but are prohibited from doing so.
Coinbase operates under the protectionist policy of the US and still only has 1/10th of the volume that Binance has (with the same amount of employees). I never got what the fuss is about Coinbase compared to all exchanges, except for the "silicon valley bro" angle
This is sorta misleading. Coinbase absolutely dominates the US market as far as crypto goes, especially large retail accounts. Binance is mostly smaller trading worldwide (guys with $1000 speculating on shitcoins and such), not 5-7 figure US crypto accounts like with Coinbase.
Most crypto is traded outside of the US though; most of the volume is on Binance and Bitmex. In this sense they cut themselves off from many customers. The advantage of their business model seems to be that with less competition from other US-law-abiding exchanges (because there are so few of them), they can charge much higher fees: Coinbase fees are higher than most large non-US exchanges, and Gemini fees are insane, something like 1% per trade.
From the casual attention I pay to this, I thought Coinbase was one of the, if not the, largest US exchange at this point. I'm surprised no one has even mentioned it here. Am I missing something?
Is the US government really allowing competition though? They've been pretty adamant at chasing away the much bigger and cheap Binance in favour of the local Coinbase.
Coinbase acts like this because it was founded from day one to serve the US market, and everything that it has done has been to invest millions of dollars a year into complying with US law. Coinbase has only in the past couple months, started expanding internationally so they don't die immediately in case the US regulatory system decides to cannibalize them.
Binance acts like this because complying with US law is ridiculously expensive. Binance cares most about serving the remaining 95% of humanity that does not live in the US. Maybe seven years or so ago they really started shifting things around so their US services are expendable, and could be jettisoned at any moment if US regulators start biting.
Both are entirely reasonable strategies, and it's why I, as a US citizen, moved everything I had in Binanace away 7 or so years ago, and only ever do anything custodial with Coinbase. Back in the before times, I had accounts across multiple global exchanges so I could run arbitrage bots etc, but now it's basically Coinbase or nothing when it comes to custodial exchanges.
You have to love the irony of the centralization effects we are seeing with cryptocurrencies that pride themselves on being decentralized and beyond regulatory control of individual nations.
Coinbase's success not only reflects on the substantial amount of control that they exert. It also reflects on that of the U.S., which regulates Coinbase.
Coinbase effectively has regulatory capture when it comes to the actual trading and speculation business (not custody). All traders prefer the lower fee derivative exchanges for speculation and hedging such as Huobi, Okex, Bitmex and even Binance for spot. Just compare the volumes. But US customers are locked out.
If you opened an exchange and did nothing but trade bitcoin, and only bitcoin, you would be free and clear, but there is no real money in that. Coinbase argued a few years ago they were losing to competition because their competitors could do a lot of gray area stuff they couldn't to do being a US-based traded company. Getting listed on Coinbase used to be the gold standard of a trusted, respectable crypto, but they at some point decided screw it and just embraced the coming legal challenges.
Very few people outside the US trade on Coinbase because they have monopoly margins.
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