Coinbase, the dominant U.S. cryptocurrency exchange, is aiming to attract more customers by providing zero-commission trading. Yet, the reality isn’t as straightforward as it seems. As of May 18, Coinbase One, an enhanced membership offering, is now featuring commission-free trading, increased staking rewards, and expedited customer support.
The Real Cost of Free Trading on Coinbase
However, this opportunity comes at a cost – a monthly subscription fee of $30. Coinbase has drawn criticism for charging some of the industry’s most substantial trading fees, which account for a significant portion of its profit. The offer to waive these costs might be appealing to high-frequency traders or large-scale investors. Still, many such individuals are likely to opt for decentralized exchanges (DEXs), which typically charge far less in fees.
Coinbase One is now offering a one-month free trial that includes priority customer support – another area in which the company has faced criticism. The new approach suggests that Coinbase users will now need to pay for efficient customer service response times. The membership also provides help with cryptocurrency tax filings.
The company plans to extend its Coinbase One access to the United Kingdom, Germany, and Ireland, along with the United States. Partner perks, including those with Messari, CoinTracker, and Lemonade, are also part of the offering.
Coinbase One Subscription Service Set to Expand Across Europe
As a move to increase its user retention and recurrent revenue, Coinbase plans to roll out Coinbase One, its subscription-based offering, to 35 countries. This is happening amidst a bearish cryptocurrency market.
Initially introduced in beta in late 2021, Coinbase One is set to go live in the U.S., UK, Germany, and Ireland, with other European nations to follow soon.
Coinbase One provides several features, such as zero trading fees, improved staking returns, around-the-clock customer support, and prefilled tax return forms, explained Phil McDonnell, Coinbase’s Senior Director of Product Management.
Given the current downturn in the crypto market, Coinbase aims to diversify its revenue sources, which have traditionally been dominated by trading fees.
Coinbase’s strategy seems to be yielding results as the company’s subscription and services revenue skyrocketed 138% to $361.7 million in Q1 2023, up from $152 million the previous year. In 2022, overall subscription and services revenues grew more than 17 times to $793 million, up from less than $50 million in 2020, as per the company’s Q4 2022 shareholder letter.
“We’re offering zero-fee trading to create a situation where our customers benefit, and we believe this will lead to our success in the long term,” commented McDonnell.
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