Well, it has been no secret that the global bitcoin margin trading market competition has been one-sided for a long time. BitMEX, which recently hit the landmark of $10 billion daily volume on May 12 along with 1 million bitcoin in daily volume, equivalent to nearly $9 billion in mid-2018 has clearly dominated its competitors Coinbase and Binance.
The latest edition of The Block’s podcast The Scoop featured Coinbase Vice President of Business, Data and International Emilie Choi who was vocal about the company’s consideration of the adding margin trading feature on the platform.
Similarly, a Binance representative told TechCrunch about the companies plans to launch its margin trading option in the near future.
So by the looks of it, Coinbase and Binance are looking to fight back and even the odds.
Coinbase vs BitMEX & Binance?
What stands in the way of Coinbase and the new margin trading feature is gaining regulatory clarity from the U.S. authorities.
BitMEX currently does not allow U.S. bitcoin traders from trading on its platform. Binance has also remained silent about whether they would support U.S. Bitcoin coin traders when it launches its margin trading functionality.
This is a huge opportunity for Coinbase as the United States is an open market for them if this remains the case.
As BitMEX and Binance continue to concentrate their margin trading operations outside of the U.S., Coinbase will have a monopoly over margin trading services in the country if they do decide to bring the feature to The U.S.
“We still need to figure that out because there’s not a lot of regulatory clarity there right now in the US. And so that that is being discussed.
We couldn’t probably be more differentiated than them in terms of the focus on the fiat to crypto bridge and being that safe trusted center of the crypto economy. So I think they’re playing one game, we’re playing another.”
Adding to these comments of Coinbase’s Vice President, Coinbase President and COO Asiff Hijri said :
“Coinbase will use this financing to accelerate: Global expansion–building the infrastructure between fiat and crypto in regulated markets around the world; Offering more crypto assets, quickly — we see hundreds of cryptocurrencies that could be added to our platform today and we will lay the groundwork to support thousands in the future”
Potential for Margin Trading?
The past few months have turned out to be revolutionary for cryptocurrencies as the cryptocurrency market surged by more than $100 billion as the bitcoin price shot through a whopping 135 percent.
As the market regains momentum, exchanges like Coinbase, BitMEX, and Binance will see a large increase in volume, bringing in the necessary cash flow to keep improving their services and grow in scale as a company.
Even with the 16-month correction that hit the cryptocurrency market last year, Coinbase recorded total revenue of $520 million, this is no small figure compared to other exchanges in the market. But, based on a Bloomberg report the company’s projected annual revenue of around $1.3 billion and $520 million is merely 40 percent of the projected figure.
If Coinbase manages to successfully open a fully regulated and transparent margin trading functionality under U.S. laws with all the necessary legal approval it will have a huge market under its control. Coinbase has also been pushing other currencies into its services other than just Bitcoin.
This aggression in decision making just might be what Coinbase needs to dethrone its rivals and be the new leader of the Cryptocurrency revolution.
Last October saw The exchange securing a $300 million investment for its global expansion and expanding its services to more digitals assets from Tiger Global.
Whatever might be the case, Coinbase and its competitors need to find new markets to capitalize if they wish to survive in the highly volatile environment of Cryptocurrency trading.
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Disclaimer: The authors of this website may have invested in crypto currencies themselves. They are not financial advisors and only express their opinions. Anyone considering investing in crypto currencies should be well informed about these high-risk assets.
Trading with financial products, especially with CFDs involves a high level of risk and is therefore not suitable for security-conscious investors. CFDs are complex instruments and carry a high risk of losing money quickly through leverage. Be aware that most private Investors lose money, if they decide to trade CFDs. Any type of trading and speculation in financial products that can produce an unusually high return is also associated with increased risk to lose money. Note that past gains are no guarantee of positive results in the future.
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