Coinbase is filling orders above market rate | Hacker News Reader

Coinbase is filling orders above market rate

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26 pointsnodesocket19 comments

Coinbase has a spread baked into their brokerage price and this is public and available in their support docs.

Literally just Google "Coinbase fees": https://support.coinbase.com/customer/portal/articles/210959...

Doesn't this feel predatory though? They already charge a transaction fee? Any reputable online-brokerage that charged above market prices for stock market orders would get destroyed for this.

Lots of online brokerages do this. This is how almost every Forex brokerage operates - you buy above and sell below market rate, which is how they make their money.

Only the bad forex brokerages. The good ones (ECN) take commission instead.

Ahem use gdax, it's 0.25% transaction fees. Coinbase started when people were buying btc here and there once a year and forgetting about it, the main benefit or their recent expansion is the ability to freely send money to and from coinbase to gdax and then trade with 1/8th of the transaction fees and automate with their gdax API...

If you are doing high frequency trading with coinbase and not gdax or any cashing out with the fee you are doing it wrong.

They offer a product with lower fees for those who qualify. Others say this is standard for a brokerage. Seems like a fee for additional risk in serving less-vetted customers.

This is like complaining that the rates at the airport currency exchange are worse than in your FX trading account.

Coinbase isn't a brokerage, it's more akin to a bank, and like a bank you're not going to get the market rate if you want to exchange currency. If you want to use a brokerage, use GDAX.

Coinbase has a history of canceling orders placed at lower price if the price spikes to a higher level. All other companies honor prevailing price at the time of order.

Top that off with Coinbase's buggy automated KYC system, hackable 2FA, and lack of customer support, and it makes me wonder if this is the best that $140 million investment can deliver?

Question as I'm not a "hacker" and don't claim to be, but what are the worst possible case scenarios with hacakable 2FA outside of individuals getting screwed over as opposed to the platform itaelf becoming unstable? Secondly 2FA has never claimed to be 100% secure by any company unless coinbase is promising to be the first company to do so? That is my understanding but if there is something particularly vulnerable about coinbase or gdaxes implementation of 2FA what is it? I know you can set up multiple forms of backup but I use Google authentiactor which becomes just about as vulnerable as who can get into my phone depending on where I leave it if I lock my phone if I lock the app etc etc just like any other form of 2FA? I'm genuinely curious as I am just learning about encryption in my spare time but by no means an expert.

Regardless about coinbase being insecure in general I was looking/curious about the bug bounties coinbase has been offering (and for gdax too as they are under the same company umbrella) and the highest bounty bid range that has been claimed is $5k but they offer up to $50k in bug bounties up to remote exectuable code for gdax.

As far as the $140milliom, coinbase/gdax are hiring multiple positions for backend gdax senior engineers and other support. The recent infusion of $140million is only from a few months ago so I'm pretending the money wisely and hiring high quality people doesn't happen overnight.

Secondly, alot of the funding has been spent on fees for liscensing in NY as coinbase continued to pull through as multiple other platforms pulled out of NY when it became nightmarishly expensive and overly complicated to deal with relative to every other state.

Finally, as coinbase is one of the few maybe the only besides one or two others that is liscensed in NY that means wallstreet is trading on it, so the spikes are definitely subject to be exposed or show other latency issues on the platforms that are legal for people to use, now that multiple banks have come out and acknowledged they are trading with BTC.

What this guy is complaining about is effectively a 0.24% spread. This is directly from Coinbase's site:

Your exchange rate for buying or selling digital currency through our Conversion Service is calculated as the market rate of the digital currency on Coinbase’s GDAX platform, plus a spread between 25 to 100 basis points determined by the size of your transaction, market volatility and length of time using Coinbase ("Exchange Rate").

This guy complains about a one-fifth-of-one-percent difference with one-minute precision.

Bitcoin prices on one exchange frequency change by more than this in any given minute, so what part of 6:44 PM is he talking about?

Also, there is no "market price" with a 0.2% precision when prices on various high-volume exchanges vary 10x this amount at any given moment.

https://imgur.com/a/7gFaI

I don't get it. Coinbase is more costly than using the underlying exchange directly. Is that unexpected? It's a convenience service. There are costs to this convenience.

The $2 "fee" looks like a 4% credit card payment processing fee, pocketed by Stripe or the likes, not Coinbase's fee.

They are already charging a transaction fee, why should their execution price be above market?

I know GDAX's highs at different candle intervals aren't consistent or accurate. This is probably related to the same kind of UI or data processing issue and not some wild conspiracy.

I noticed this too. Anyone want to guess why they are bumping the spread so much? Their price is over 100 USD higher than Kraken's prints tonight...

Why? Because they're keeping the difference.

The market is very volatile and there is probably significant spread between buy and sell. Most exchanges (any currency, not just for bitcoin) will earn some revenue through the inevitable spread. So if spread is large, then shouldn't fault coinbase for filling those orders accordingly.

Anybody have better BTC market feeds? The graphs I am looking at show the market price should have been around $9,600.

https://imgur.com/a/e0Gtt

The best feed to look at is GDAX for Bitcoin on Coinbase https://www.gdax.com/trade/BTC-USD

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