“Institutional money is coming!”
We heard this claim all around since 2017. Mostly retail investments fuelled the crypto market’s parabolic growth so far, so the institutional capital flow will represent another catalyst for a new Bull market. What if the arrival of new big players will have a first different impact on the ecosystem?
Crypto-intermediaries are now ready to offer premium and high-quality services for professional and institutional clients. Last week, Coinbase announced to raise (significantly!) their fees for low-volume traders, favoring those customers that monthly trade cryptocurrencies for millions of dollars of value.
As we can see, to get pricing aligned to competitors, users need to trade a monthly dollar value of crypto of at least 100k USD. That will leave many paying an above-average price that will be difficult to be compensated by other services offered by the company.
To be more precise, a “maker fee” is applied when the order is not immediately executed, but posted on the order book, waiting to be executed. The order basically “makes liquidity” for the market. On the contrary, a “taker fee” applies when the order gets executed immediately, “taking liquidity” out from the exchange.
Broadly speaking, all the “market orders” are subjected to a taker fee. Instead, a maker fee is added to those “limit orders” that don’t match the current bid or ask price (depending on whether they are sell or buy orders).
Coinbase Pro is one of the most popular trading exchanges. It is the easiest way to buy cryptocurrencies with Fiat in many countries. It’s safe to assume that small investors represent a large part of their userbase. These users didn’t welcome the news of raising fees.
At Coinrule, we get in touch daily with our users, and we can feel clearly the disappointment regarding this news. We also get asked often what other alternatives there are to Coinbase Pro to reduce the trading fees. It’s important to stress that the fee’s burden has a substantial impact on the trading performances.
If you are looking for some alternative trading venues with lower fees, here are two trustworthy alternative options you will find on Coinrule.
Both these exchanges have a secure gateway Fiat/Crypto, which represented the primary competitive advantage of Coinbase.
Kraken is one of the oldest exchanges around, and probably the main direct competitor for Coinbase. In the beginning, the trading platform was affected by recurring instability issues that are now solved thanks to a radical upgrade released in 2018. The US-based company has a strong commitment to security and customer service.
Kraken’s trading fees are quite convenient, even for low-volume traders. Among the main advantages of using Kraken I note:
- A very high level of liquidity of the exchange. Bid/ask spreads are generally low, and also medium-sized orders don’t cause significant volatility to the order books.
- Kraken regularly adds new coins, so it gives the possibility to provide a Fiat currency gateway for coins with lower market capitalizations.
Kraken is available worldwide except for a short list of restricted countries. You can deposit US Dollars, Canadian Dollars, and Euro via wire, SWIFT, or SEPA.
Plus, Kraken offers margin trading and OTC options for those traders seeking more advanced trading products. The radically different user interface of Kraken is the only main drawback of a transition from Coinbase Pro to Kraken. Coinbase Pro is intuitive and straightforward also for beginner traders. Instead, the Kraken platform needs some time to get used to it.
No doubt that when it comes to reputation in the crypto space, Bitpanda should come into your mind quickly. The company is in the crypto business since 2014 and just recently launched an exchange.
So far, the over one million Bitpanda’s users were able to buy and sell cryptocurrencies having the company ad direct counterpart. Now the release of Bitpanda Global Exchange will allow users to trade freely crypto setting up their own orders using advanced trading tools.
The platform will look very familiar to those accustomed trading on Coinbase Pro, as the front end is quite similar. For now, the offer of trading pairs is limited, but with time the company plans to add the other more than 20 digital assets already available on the “basic” platform.
The liquidity is flowing daily. While you can still witness wider bid/ask spreads on some trading pairs, you can trade BTCEUR or ETHEUR with mid-sized orders with no worries.
What makes Bitpanda a valid alternative to Coinbase Pro is the pricing. The fee structure starts from 0,10% for lower-volume traders. Moreover, also withdrawing funds from the exchange is quite cheap. They are basically aligned to the cost of submitting a transaction on the Blockchain. It seems like Bitpada doesn’t add much markup on that. Pretty remarkable!
You can try yourself opening an account HERE!
The crypto space is evolving day after day, adapting to an evolving ecosystem. It is fascinating to witness how major players evolve and develop their products.
In the same way, Coinrule is working hard to release significant improvements to the platform very soon.
Stay tuned and…