2021-12-10 16:21 |
Coinbase’s COO, Emilie Choi, says the exchange is preparing for fee compression.She highlights key areas the crypto exchange is diversifying towards. Coinbase continues to have one of the highest trading fees spread among crypto exchanges.
Chief Operating Officer (COO) of Coinbase, Emilie Choi, has revealed that the company is gearing up for compression of trading fees anytime in the future.
Speaking at Goldman Sachs’ U.S. Financial Services Conference today, the COO revealed that Coinbase had elaborate plans that would diversify the company’s income stream away from its main revenue source, trading fees on cryptocurrency trading.
Preparing for the future.
The COO stated that the company was yet to see any “actual compression” having not carried out any restructuring of fees on the retail side. She further adds that this is so because the exchange remained one of the most secure crypto exchanges and customers were willing to pay for that essential service.
“We haven’t seen the actual compression. We haven’t changed our fee structure on the retail side yet. Consumers are more than willing to pay a certain fee percentage for the services we offer, particularly the security,” she said.
However, the company anticipates that trading fee compression will come “at some point.” This is why Coinbase has been making some key investments and subscription services to get to a place where trading fee compression would not be a “much of a concern,” she added.
The COO of the U.S’s largest cryptocurrency exchange went on to highlight some of these investments the firm has been making. Some of these investments include custody, trading, derivatives, and other services that institutional investors want.
Choi noted that Coinbase has been aggressively involved in mergers and acquisitions. She adds that for 2022 the exchange will keep paying attention to DeFi, and NFTs.
Diversification is good news for Coinbase investors.
The news of diversification away from dependence on trading fees may be good news for the company’s investors. It may mean that they may be able to breathe a sigh of relief from fears that Coinbase’s revenue will miss projected targets when the crypto market experiences price slumps that slows down trading activities and in turn reduces revenue to the exchange as was shown in the exchange’s Q3 report.
Meanwhile, Coinbase has often been noted to charge a higher trading fee than most of its competitors. Its fee spread ranges from 0.5%-4.5%, varying by type of transaction. Compared to Binance, the biggest cryptocurrency exchange globally, where trading fees range from 0.015%-0.10% for purchase and trading fees, Coinbase’s fees are quite steep according to the Verge.
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