Coinbase Pro Increases Fees. What Could Go Wrong?
Cryptocurrency exchange Coinbase Pro, operated by major U.S.-based crypto company Coinbase, has made a move that in turn made its customers and the Cryptoverse at large quite unhappy – for small users some fees will triple.
Starting with Monday, October 7th, Coinbase Pro will be implementing its new fee structure, which comes with a raise in fees. For the lowest tier, transactions below USD 10,000, the new fee is set at 0.50%. This is a significant change, given that the maker fee for transactions below USD 10.000 stands at 0.15% and taker fee 0.25%.
Their announcement says that this update “will slightly increase fees for lower-volume customers and reduce fees for high-volume customers,” while those who are transacting above USD 50,000 a month “will either see a reduction in their trading fees, or no change at all.”
Additionally, three new tiers below USD 100,000 a month have been introduced: USD 0-10,000; USD 10,000-15,000; and USD 50,000-100,000.
New fee schedule: the higher the volume, the lower the fees
The reaction was pretty much instantaneous with people saying they’ll take their business elsewhere, and discussing what the best alternative for them could be, with COSS.io, Gemini, Binance, Hodl Hodl, LocalBitcoins, Voyager, and bisq being some of the recommendations. Others, like crypto analyst Matt Westover asked Coinbase Pro why would anybody trade on their platform, given the high fees, lack of competitive fee structure and rewards, no incentive for whales to come, etc.
And while Coinbase Pro claims that the raise in fees is their way market depth and liquidity, the Cryptoverse seems to disagree.
Even if you have a relatively small trading portfolio (5-25k) that adds up massively. This is rediculous and a great way to drive away every single retail trader. This is an eat or get eaten space, being 5 times as expensive as the next guy without any reason is suicide.— Satoshihunter (@satoshihunterr) October 3, 2019
Popular trader and economist Alex Krüger shared his opinion on this new development too, saying that, while discount brokers in traditional markets are moving towards zero trading fees for customers, Coinbase is doing the opposite, increasing the fees since March, further adding that “Coinbase is actually subsidizing 60% lower fees for highest volume traders with a 233% increase in fees for the lowest volume traders.”
Trading volume on Coinbase Pro
In the meantime, just a day before this announcement, Coinbase came out with one saying that the platform has launched their USD Coin (USDC) Rewards program, whereby eligible customers from the US will earn 1.25% annual percentage yield (APY) rewards on every USDC stablecoin they have on Coinbase.
Also, as reported yesterday, the exchange resumed real-time payments in the UK, with the sources familiar with the matter saying that Coinbase is now a client of ClearBank, one of the U.K. “challenger banks,” after it broke with Barclays three months ago.