Coinbase conversion fees for monthly volume exceeding $75 Million will be implemented in February.
Recent developments by the leading cryptocurrency exchange in the United States have come to light. Coinbase has decided to introduce commission fees for conversion from USD Coin to U.S. Dollars that exceed $75 million within a 30-day timeframe.
The new fee structure is set to take place on February 5, 2024. This new fee structure will not affect members of the Tier 1 and Tier 2 categories of the Coinbase exchange liquidity programs.
The Coinbase exchange liquidity program provides incentives or benefits for users who contribute to increased liquidity by actively trading or providing liquidity to the exchange’s order book.
Exchanges design these programs to attract market makers, high-frequency traders, and users, contributing to a more liquid and efficient market.
The announcement on the Coinbase help page on January 30 indicated a change in the platform’s fee policy for high-volume USD Coin to U.S. dollar conversions.
The terms of the new fee structure state that customers will now pay a 0.10% fee for a monthly volume between $75 million and $150 million.
For transactions that lie in the range between $150 million and $500 million, the fee is set at 0.15%.
Lastly, for transactions exceeding $500 million, the fee is set at 0.20%, the maximum rate the exchange will charge.
To put it into perspective, if anyone is involved in a transaction that accumulates to exactly $500 million monthly, they will have to pay $1 million in fees to the Coinbase exchange.
All charges will be deducted directly from the converted amount from USDC to U.S. dollars.
According to Coinbase’s announcement, the net conversion is determined by subtracting the overall volume of U.S. dollar to USDC conversions from the total volume of USDC to U.S. dollar conversions within 30 days.
JPMorgan analysts downgraded Coinbase’s stock to an underweight rating on January 23, attributing the decision to the declining price of Bitcoin and the listing of shares of spot BTC exchange-traded funds.
Underweight rating typically indicates that financial analysts believe the particular stock is expected to underperform compared to other stocks in the market or a relevant benchmark. Investors may consider reducing their exposure to or selling the stock.
An underweight rating can be based on various factors, including the company’s financial performance, market conditions, industry trends, or specific risks associated with the stock.
In the case of Coinbase, JPMorgan analysts downgraded the stock to an underweight rating as they cited the falling price of Bitcoin and the impact of listing shares of spot BTC exchange-traded funds contributed to Coinbase’s stock performance.
Subsequently, on January 25, the stock reached a monthly low of $121. As of the current writing, the stock stands at $132.82, reflecting a nearly 20% decrease from its value at the start of January.
However, even if JPMorgan analysts downgrade the current potential of Coinbase’s stock, the exchange remains one of the principal advocates for the crypto market in the United States.
The exchange showed confidence and commitment towards cryptocurrency when it publicly replied to the United States Treasury Department’s Financial Crimes Enforcement Network when they announced that more efforts should be made to scrutinize crypto mixers.
Crypto mixers, also known as cryptocurrency mixers or tumblers, are services designed to enhance the privacy and anonymity of cryptocurrency transactions.
These tools are used to obfuscate the origin and destination of cryptocurrency funds, making it more challenging to trace the money flow on the blockchain.
Coinbase believes that focusing efforts towards scrutinizing crypto mixers is nothing more than a waste of time.
Coinbase’s nonprofit advocacy group, Stand with Crypto, has been actively monitoring the stance of U.S. lawmakers on cryptocurrency, identifying approximately 18 senators supportive of crypto.
Additionally, Coinbase is at the forefront of its legal dispute with the United States Securities and Exchange Commission (SEC).
The SEC filed a lawsuit against Coinbase on June 6, 2023, accusing the crypto exchange of violating federal securities laws. Analysts believe that Coinbase has a 70% likelihood of successfully obtaining a full dismissal of the lawsuit.
