Yesterday, San Francisco-based crypto exchange, Coinbase, announced that they would be increasing their fees for the lowest volume tier of traders on their Coinbase Pro platform, effectively helping the rich get richer, and the poor stay that way.
Not only did the increase only impact the lowest wealth users on the platform upset the cryptocurrency community at large, but it’s got many clamoring for a Coinbase killer to emerge, and unseat the market leader from its throne.
Coinbase Pro Raises Fees, Sparking Crypto Community Outrage
Coinbase, it’s a name that became synonymous with cryptocurrencies like Bitcoin, Ethereum, and Ripple at the height of the crypto hype bubble. The company’s flagship retail smartphone app skyrocketed to the top of Apple’s App Store charts and cemented the brand as a crypto industry leader.
Related Reading | Coinbase Crypto Milestone: Amasses 30M Users, 5M in Last 10 Months
But times have changed, and Coinbase has found itself amidst stiff competition elsewhere in the marketplace. It’s trading volumes have suffered – as has others in the space due to the lack of interest in the market as a whole – and to keep revenue performance strong, the company has opted to raise the fees on its Coinbase Pro platform, under the guise of increasing “depth and liquidity” on the platform.
Coinbase showed us today that they never really cared about the little guy… very telling, & probably the beginning of a suicidal direction.
Reputation takes years to build, but can be lost in an instant. Honestly, this was some very disappointing news.
— Omar Bham (Crypt0) (@crypt0snews) October 4, 2019
Fees were raised by as much as 50% on the lowest tier of trading volume, essentially only hurting those with the least amount of capital to trade. The crypto community was quick to point out that significantly hiking fees in such a manner, would have the inverse effect, as users flee the platform to more affordable options.
Market Leader Finds Itself Vulnerable To Competitors
All businesses need to adjust cost structures from time to time, whether is income or expenditures, things often need changing depending on the natural ebb and flow of any industry.
However, Coinbase’s fee hike comes at a time when it exceptionally vulnerable, and should instead be capitalizing on Binance losing market share through a regulator-forced blockage of US users from its flagship platform. Binance has since opened a US-based platform for only US-investors, posting an enormous threat to Coinbase’s comfy spot at the top of the crypto market throne in the United States.
Coinbase will charge higher fees for lower volume traders on Monday.
Ethos where were you to punish these guys?
Giving away control, vision and leadership to another company.
Hopefully one day there will be an actual Coinbase killer.
— Suppoman 🔥₿🚀 (@MichaelSuppo) October 4, 2019
Following the news circulating that Coinbase Pro would be raising fees, the community began calling for a “Coinbase Killer” to emerge. Binance, being arguably the most successful exchange globally, could give Coinbase a serious run for its crypto dominance in the coming months if Coinbase continues to upset its user base.
Related Reading | Can Coinbase Capitalize On Binance Becoming Less Attractive To US Crypto Investors?
Binance was quick to respond to what they likely viewed as an opportunity, offering a month of zero trading fees for users who register for the new US-based crypto platform Binance US.
Who made the fees lower? And who benefits? 👀😂😝 https://t.co/c05uGhIPF7
— CZ Binance (@cz_binance) October 4, 2019
But where Coinbase is failing with fees, they may still have an edge over Binance – beating them at their own game. Binance US only offers a small amount of the altcoins that the flagship site does, while Coinbase continues to scale its offering and is now eyeing some exciting, new and exotic altcoins to woo Binance users unhappy with the US experience.
Coinbase may have shot themselves in the foot, and squanderer what would otherwise be the perfect opportunity to gain an edge over Binance.