Coinbase, one of the leading crypto exchanges in the US, raised several questions about fairness towards all crypto traders on its exchange after the announcement of a ranked fee system on the platform.
Yesterday, Coinbase said that they would be raising trading fees for traders with the least trading volumes, which essentially means that those with small crypto holdings will be charged more than those who have vast amounts of cryptocurrency to their name.
Outrage in the crypto community over Coinbase fees structure
The new trading fees structure announced by Coinbase will make wealthy traders even wealthier and will condemn those that are less affluent to unaffordable charges.
Several members of the crypto community expressed outrage over the decision made by Coinbase, and many said that there is a need for another exchange to come forward and unseat Coinbase from its position as the leading cryptocurrency exchange.
Many stakeholders think that Coinbase has taken advantage of its relevance in the crypto trading industry and has decided to rip off small traders.
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
For many crypto traders, Coinbase is the exchange through which they got into crypto trading as it has been an industry leader for many years.
At the peak of the crypto craze, Coinbase offered several trading options including Bitcoin, Ripple and Ethereum.
The firm offered its clients a trading mobile application that was highly popular on the Apple App Store and the convenience of this app helped the company to become the top provider of cryptocurrency trading options.
Several other companies have entered the cryptocurrency exchange market and competition has intensified.
Although the number of people who engage in the trade of these digital assets has increased significantly over the years, these traders are now spread over several platforms that offer this service.
Trading volumes across the industry have gone down due to a general lack of interest in cryptocurrency that has come about as a result of the faltering value of Bitcoin.
When all these factors are considered, the move that Coinbase has made couldn’t be any more terrible and will place the exchange firm in a precarious position.
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
Coinbase said that it is raising its trading fees to increase liquidity and depth on its trading platform.
Fees for low tier traders have gone up by as much as 50% and this will greatly affect those that have small crypto holdings. Coinbase is set to lose several clients as traders will likely jump ship in favor of cheaper trading platforms.
The move will also affect the mass adoption of the asset class as traders who were considering entering the market with small holdings will opt to stay with traditional asset classes over being subjected to the high trading fees on Coinbase.
Competitors swooping in
After Coinbase made its announcement, some of its competitors took the chance to swoop in and advertise their cheaper platforms to crypto traders.
Binance tweeted that they would be offering new traders a month of zero fee trading on their US-centric platform.
Although Binance might have a smaller list of altcoins that it can offer these traders in comparison to Coinbase, it shows that competitors are always ready to take advantage of a misstep.
Lets lower barrier to adoption.
— CZ Binance (@cz_binance) October 4, 2019