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Competition between bitcoin and cryptocurrency exchanges is intensifying as millions of new users flock to crypto after the huge price hikes this year.
The price of bitcoin, after climbing to around $ 65,000 per bitcoin in April, has fallen sharply, but San Francisco-based Coinbase continues to generate millions in transaction fees.
Now Jack Mallers, the managing director of Strike, the Chicago-based bitcoin payments company, has warned that Coinbase is not “competing in the open market,” announcing that Strike would allow US customers to buy and sell. sell bitcoin almost at no cost.
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The price of bitcoin has fallen sharply since reaching highs of around $ 65,000 per bitcoin in April, … [+]
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“It’s unclear if Coinbase can attempt to compete on fees, even if they wanted to,” Mallers, who recently rose to prominence among the bitcoin and cryptocurrency community when it was announced that Strike would work with the government of El Salvador to bring mass bitcoin payments to the country, wrote in a blog post.
Mallers, who is also the CEO of Strike’s parent company, Zap Technologies, warned that bitcoin buyers using Coinbase are paying to “help subsidize the rest of [Coinbase’s] efforts “with other cryptocurrencies, asking how can Coinbase afford this” customer acquisition? “
“Well, probably because they charge users too much to acquire bitcoin. Make no mistake about it, when you buy bitcoin on Coinbase, you are supporting sh * tcoins,” Mallers wrote, using a term adopted by so-called bitcoin maximalists who think cryptocurrencies are other than bitcoin. worth nothing, and citing a quote from Coinbase CFO Alesia Haas, who said that Coinbase “isn’t trying to win on the fees.”
This week, CEO Brian Armstrong detailed his plans to launch a Marketplace for decentralized apps, a project apparently inspired by Apple’s App Store, and accelerate the pace at which he adds digital assets. The exchange “will bring more assets to Coinbase, faster,” Armstrong wrote in a blog post.
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The price of bitcoin has jumped over the past year, helping to trade bitcoin and cryptocurrency … [+]
Coinbase
Strike, which uses Bitcoin’s experimental second-layer Lightning network to process transactions, said it will charge around 0.3% for Bitcoin transactions. Coinbase, for comparison, recovers almost 4% of some trades. Strike’s service, which Mallers says won’t make any money for the company, also compromises PayPal and its affiliate Venmo, Square’s Cash App, and Swan Bitcoin.
Coinbase, the largest U.S. cryptocurrency exchange with 56 million verified users and $ 223 billion in assets, became the first crypto exchange to go public in April, listing its shares directly on the Nasdaq. In May, Coinbase said it generated $ 1.8 billion in revenue in the first three months of the year, up from $ 191 million in the same period a year ago, as profits surged at $ 771 million from $ 32 million, almost entirely thanks to trading fees.
“We just pulled the pin out of the grenade and threw it into the crowd,” Mallers wrote. “Buying bitcoin won’t cost more than it takes to acquire it. Buying bitcoin won’t subsidize sh * tcoin casinos.”
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