Coinbase, the largest US crypto exchange, is planning to tap into Australia’s 0 billion self-managed pension sector, according to a Bloomberg report. The company is developing a service tailored for this sector, aiming to cater to the growing interest in crypto investments among self-managed funds. This move comes amidst a significant increase in crypto holdings […]
Bitcoin News
Bitcoin Price Linked To Binance Vs Coinbase Battle, Quant Reveals
A quant has explained how there appears to be a relationship between Coinbase’s spot volume dominance vs. Binance’s and the Bitcoin price.
Bitcoin Has Been Reacting To Binance/Coinbase Volume Changes
In a CryptoQuant Quicktake post, an analyst discussed the dynamics in the cryptocurrency market that arise out of the battle happening between Binance and Coinbase for spot volume dominance.
The quant shared a chart below that shows how this war for dominance has played out over the past decade.
As the graph shows, Binance has been the much more dominant of the two platforms when considering the spot volume. The exchange is hosting five times as much volume as Coinbase.
The analyst notes that the difference between the two would be even higher when considering the BTC-FDUSD pair, which isn’t included in the data depicted in the above chart.
Despite the much lower spot volume, Coinbase still hasn’t been irrelevant in the market. For example, the platform is the custodian for Bitcoin spot exchange-traded funds (ETFs) like BlackRock’s IBIT and Grayscale’s GBTC.
There also appears to be an interesting pattern between the dominance of the American exchange and the Bitcoin spot price. The quant has highlighted this trend in the graph.
There have been a few instances where a rise in the spot trading volume of Coinbase against Binance has preceded surges in the value of cryptocurrency. Similarly, declines in the platform’s dominance have seemingly led to drawdowns in the Bitcoin price.
The analyst has also discussed the trend in the volumes of the two exchanges more closely, using the spot volume ratio for them, as shown below.
The chart shows that the spot volume ratio between Binance and Coinbase had spiked to very high levels in 2023, with the former’s volume being 53 times the latter’s. The reason behind this was the zero-fee scheme that Binance had introduced for the Bitcoin trading pairs.
However, Coinbase’s volume has recently risen, although the ratio remains notably in favor of Binance. This shift in the market emerged as the Bitcoin spot ETF-related news started to intensify.
The quant concludes:
The dynamics between these exchanges are complex, but the graphs show that each exchange’s dominance at specific times has a direct impact on the price of Bitcoin. It’s a true battle between the market’s biggest players, where competition is constant, and the outcome is reflected in cryptocurrency movements.
BTC Price
At the time of writing, Bitcoin is trading at around ,800, down 3% over the past week.
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Bitcoin News
Bankrupt Crypto Lender Blockfi Enlists Coinbase to Distribute Crypto Payouts
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Bitwise Heralds Coinbase (COIN) As The ‘Next Amazon’: Price Targets
In a recently published report by Bitwise, the leading crypto index fund manager, a striking comparison has been drawn between Coinbase and Amazon, highlighting a significant yet under-reported aspect of Coinbase’s business — the Base Layer 2 network. Titled “It’s All About That Base (and Other Thoughts on Coinbase),” the report authored by Matt Hougan and Juan Leon delves deep into the financial and strategic shifts underpinning Coinbase’s latest successes and potential future.
Amazon Of Crypto? Bitwise Projects Stellar Future For Coinbase
Coinbase’s latest financial results have been a revelation, demonstrating robust growth and operational efficiency. The company reported .6 billion in net revenue, marking a 116% increase year-over-year, significantly surpassing Wall Street’s expectation of .36 billion.
Profits were equally impressive, reaching .2 billion with total cash reserves swelling to .1 billion. Each of Coinbase’s business lines showed notable growth: consumer trading revenue rose by 93%, institutional trading by 105%, stablecoin revenue by 15%, blockchain rewards by 59%, and custodial services by 64%.
Despite these strong numbers, the stock has trended downwards, suggesting that the market may not fully appreciate the depth of the company’s strengths. However, Bitwise highlights a less conspicuous but potentially transformative element of Coinbase’s portfolio: the Base Layer 2 network.
Launched in August atop Ethereum, Base aims to enhance the blockchain’s throughput while lowering costs. It operates similarly to a bar tab, aggregating transactions and settling them in batches, thereby reducing transaction costs to under .01 and speeding up processing times to less than one second.
The adoption rate of Base has been staggering. The network saw a 74% increase in transactions quarter-over-quarter in the first quarter, with a 40% increase in April alone compared to the entire first quarter. The exponential growth in the number of developers using Base, which increased eightfold, underscores the network’s rising significance and the broader industry’s interest.
From a financial perspective, Base has been lucrative for Coinbase. In the first quarter alone, the network generated .4 million in transaction fees, of which Coinbase retained .5 million. This high-margin revenue stream continued into April, adding another million to Coinbase’s profits. Given these trends, Bitwise predicts that Base could soon be contributing million to million in monthly profits to Coinbase.
The analogy with Amazon is rooted in the transformation potential of Base. Just as Amazon evolved from a simple online bookstore into a retail giant and later a dominant force in cloud computing through Amazon Web Services (AWS), Coinbase could similarly evolve from a crypto brokerage to a fundamental infrastructure provider for the crypto industry.
This shift could redefine Coinbase’s role and impact within the market, positioning it as a central infrastructure entity in the crypto ecosystem, akin to how AWS underpins much of today’s web services.
The report concludes by reflecting on the significance of Base for Coinbase’s strategic direction. “[T]he early returns on Base suggest that Coinbase could end up becoming something even greater: a core infrastructure provider to the crypto ecosystem. And that would be a very big deal indeed.”
COIN Price Analysis
Analyzing the technical landscape, the price of Coinbase (COIN) currently faces a pivotal moment. After dropping to 1.20 (as of press time), down 11.4% from a weekly high of 5.79, the stock is testing significant resistance and support levels that could dictate its short-term trajectory.
The Fibonacci retracement tool, applied from a low of .62 to a high of 9.52, identifies critical price points. Presently, COIN is contending with the 0.57 level (0.5 Fibonacci level), which acts as the primary resistance. The 20-week Exponential Moving Average (EMA) provides crucial support at 9.35, with the stock recently bouncing off this level.
The Relative Strength Index (RSI) stands at 56.10, suggesting a balanced dynamic between buying and selling pressures, with a slight tilt towards buying. The recent price behavior, characterized by a candlestick with a small body and longer wicks, reflects the ongoing uncertainty and cautious sentiment among traders.
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Bitcoin News
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Coinbase Announces Support for Bitcoin’s Lightning Network
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Crypto Market Downturn Hits Coinbase, Microstrategy, and Mining Stocks Hard
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Coinbase Challenges SEC’s Definition of ‘Investment Contracts’ in Crypto Transactions
In a recent legal challenge, Coinbase has filed a brief with the Southern District of New York, seeking permission for an interlocutory appeal against the U.S. Securities and Exchange Commission’s expansive interpretation of what constitutes an “investment contract” in digital asset transactions. This pivotal case could set significant precedents for the cryptocurrency industry in the […]
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