In the last few years, the world of financial markets has seen many new and exciting products, including digital currency. These are being offered by a variety of sources, ranging from online wallets to registered investment advisers. One of the most promising and well-known of these is Coinbase. Its offerings are not as diversified as some other e-wallet providers, but the company is a leading player in the space. And while it’s not a broker-dealer or investment adviser, Coinbase is in a tough race for market share with rival Fidelity Digital Assets.
Bitcoin was too technical to go mainstream
Coinbase is a platform for buying, selling and trading cryptocurrencies. It has backers like Marc Andreessen. They launched a mobile app in early December and it briefly held the top spot on the Apple App Store. Despite its success, Coinbase has faced numerous outages over the past two years.
The company’s valuation of over $100 billion nodded to the mania surrounding the digital currency. However, it has been accused of taking money out of its users’ accounts to unregulated competitors. In its securities filing, it claimed that offshore rivals had access to customers’ funds.
Coinbase’s first major public offering (IPO) in the US is an important milestone in the journey of the cryptocurrency. It puts the currency in a mainstream financial industry. But as competition increases, the company is hedging its bets. For instance, it recently introduced several technological upgrades. One of these is the ability to integrate Layer-2 blockchains.
It’s too technical to go mainstream
What is Coinbase’s story telling you about the crypto space? The company has gone from a centralized exchange to a decentralized one, with the goal of providing customers with a convenient way to buy and sell digital currencies. They are also working on several technological upgrades, such as the integration of a Layer 2 (or 3 if you count the proof of work) blockchain. If you want to try out their platform, they offer a free test drive.
Coinbase is not alone in this quest. Decentralized exchanges such as Bitfinex, Kraken and Gemini have all hopped on the crypto bandwagon. These decentralized marketplaces have been lauded for their ability to overcome the regulatory hurdles that stymied many traditional financial services providers. Moreover, their decentralized nature allows them to offer trading without the dreaded middleman, the custodian.
However, they may be a little too technical for mainstream consumers to comprehend. In order to get the full benefit of a decentralized exchange, a consumer needs to understand how such a platform works. This is where the fintech industry comes in.
It’s locked in a neck-and-neck race with Fidelity Digital Assets
Coinbase is a leading digital currency exchange and has garnered a cult following among crypto enthusiasts. The company is based out of Silicon Valley and operates in the same general area as major competitors such as Bittrex, Changelly, and Xapo. Aside from its core offerings, the company has forged several notable partnerships, most notably with Fidelity Digital Assets.
While there’s no shortage of companies offering the service, Coinbase lays claim to the most impressive features. For example, they allow users to buy, sell, and store digital currency with a credit card, without the hassle of transferring funds from one account to another. What’s more, the company boasts one of the best mobile apps for iOS and Android. However, one caveat to be aware of is the lack of a corresponding debit card. To overcome this, you can link your bank account to your Coinbase account.
It’s not a registered broker-dealer or investment adviser
Coinbase is a digital currency platform that allows users to exchange and buy and sell cryptocurrencies. The company charges a commission on each transaction depending on the funding source and the size of the transaction. It also charges a spread markup of approximately 0.5 percent. There are two ways that users can withdraw their coins, with the first being delayed. Alternatively, users can store their coins in a vault. In the past, the company has faced a number of regulatory issues, including an insider trading scheme that led to fraud charges against a former product manager.
According to the Securities and Exchange Commission, nine of the 25 tokens sold by Coinbase were securities. On the same day, the SEC filed a complaint against the company. However, the SEC’s investigation is separate from the insider trading scheme. Instead, the SEC is looking into the practices of the broker-dealers and investment advisers that work with Coinbase.