crypto News What is Coinbase?

What is Coinbase?

What is Coinbase?

The key product Coinbase is a trading platform for trading and other operations with crypto actures. It takes third place in terms of trading among crypto -streaks.

For professional traders, a platform version called Coinbase Pro works with additional functions, and for institutional customers – the Coinbase Prime section.

Individual users are available Sports trade of cryptocurrencies, NFT marketplace, lending secured by bitcoins, as well as a debit card with a binding to exchange account. Coinbase Pro customers can trade with their shoulders, place limit and stop orders and connect to the API exchange API.

Coinbase offers a prime-broker, liquidity for transactions, marketplace data and other services.

According to May 2022, more than 170 crypto acts are available on Coinbase, 250 Coinbase Pro is available. The platform supports accounts in fiat currencies – the US dollar, the British pound and the euro.

What is the “Coinbase effect”?

Coinbase effect is a short -term change in cryptocurrency price (usually towards an increase), which occurs after the announcement of its listing on the platform. This is due to several reasons.

On the one hand, the exchange saves a relatively small list of traded crypto acts, on the other hand, information about the start of trading by a new coin until the last moment is kept secret. And since Coinbase is one of the world’s largest venues for digital currency trading, it is perceived by listing as a recognition of the high quality of the project and the high attractiveness of its cryptocurrency.

At the same time, many criticize the “Coinbase effect”, since it can give an advantage to insiders. In 2018, the company even filed a collective lawsuit with accusations of insider trade during Bitcoin Cash listing (BCH). However, after the company’s lawyers did not find evidence of this application.

Before the founding of Armstrong, he was one of the leading developers in Airbnb, and Ersam worked as a trader in the Goldman Sachs Investbank. Now the first is held by CEO in Coinbase, and his business partner is headed by the Board of Directors. Ersam also founded ParadigM, which runs the world’s largest venture investment fund in crypto industrial.

Among other key employees of Coinbase: operating director Emily Choi, Technical Director Manish Gupta and financial director Aleessia Haas.

How Coinbase has become the main crypto officers of the USA?

In the summer of 2012, the startup team was admitted to the famous Y Combinator business incubator, and already in the fall Arsmtrong, Ersam and their associates presented a service for the purchase and sale of bitcoins using bank transfer.

Coinbase held the first investment round in 2013. Its key participants were Andreessen Horowitz, Ribbit Capital and Union Square Ventures. A year later, the number of platform users reached a million people. The total amount of funds raised by the company since 2013 is estimated at more than $ 500 million.

Gradually, Coinbase has concluded contracts with large payment systems – Stripe, Braintree and PayPal, which were able to process transactions in bitcoins due to this cooperation.

In the spring of 2021, Coinbase was the first public company in the United States to manage the cryptocurrency exchange, which conducted direct placement on the stock exchange. Its shares are traded on NASDAQ under the Coin ticer.

At the start of the trading, Coin reached $ 430, and the cost of the exchange exceeded $ 100 billion. Optimism around the cryptocurrency market contributed to increasing the price of shares. Thanks to this, the cost of Coinbase briefly exceeded the capitalization of operators of the largest stock platforms in the United States-the New York Stock Exchange and NASDAQ.

However, later the price of Coin fell, after which the Law Firm SCOTT + SCOTT has filed a lawsuit on Coinbase on charges of investors. Coinbase also provided false information regarding the Japanese yen Stabelcoin Gyen, after which a collective lawsuit was filed against it.

Bear Trend on Cryptine in 2022 reflected on Coinbase indicators. According to its financial report, in the 1st quarter the exchange received a net loss of almost $ 430 million, which significantly exceeded forecasts. At the same time, back in October-December 2021, its net profit amounted to $ 840 million.

In early June 2022, Coinbase shares traded at a price of about $ 70, and capitalization exceeded $ 15.2 billion.

How Coinbase is connected with USD Coin (USDC)?

Coinbase, together with Circle, is an issuer of the popular USDC stablecoin available in various blockchains. The asset ranks second among stable capitalization coins after USDT.

At the end of March 2021, the VISA payment system launched a pilot program to integrate settlements in the USDC in its network.

Since 2022, the USDC reserves castean is BNY MELLON a large American bank. The issuer of stablecoin conducts a regular audit of funds.

Is Coinbase safe?

Coinbase dollar funds are protected by the Federal Deposit Insurance Corporation (FDIC) for up to $ 250,000.

According to official statements, the company stores 98% of customers in cold wallets that are not connected to the Internet. The remaining 2% covers a special insurance policy.

At the beginning of 2022, Coinbase introduced a new compliance tool Coinbase Intelligence. According to the company, he is able to detect illegal transactions through the API using a scoring system, as well as monitor the movement of funds and identify fraudulent operations.

Coinbase has also become the first crypto officer to receive the right to work in the UK.

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