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Comment by Kukumber | Hacker News Reader

https://www.ycombinator.com/companies/coinbase

IPO: $250 and peaked at $429

Today: $50 [1]

That's a pretty hard reality check.. building a business and raising a lot of money selling ponzi schemes, that was a hell of an idea to begin with

To finish with 10x less volume than Binance [2]

[1] - https://finance.yahoo.com/quote/COIN/

[2] - https://coinmarketcap.com/rankings/exchanges/

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To finish with 10x less volume than Binance [2]

This is sorta misleading. Coinbase absolutely dominates the US market as far as crypto goes, especially large retail accounts. Binance is mostly smaller trading worldwide (guys with $1000 speculating on shitcoins and such), not 5-7 figure US crypto accounts like with Coinbase.

Besides, I have heard many people doubt the volume numbers published by binance. Either claiming binance inflates the numbers, or binance allows wash trading which inflates the numbers.

Isn’t this quit difficult to do? Surely trades almost perfectly map to profits?

I don't think Binance's books are public so you can't see.

If you mean that I can't a fake a trade with a third party, then yes, that's true - all fake volume has to be done between parties that are in on it. Otherwise the scheme falls apart when the third party tries to withdraw/realise gains/exercise/whatever.

There's a caveat here which is that quite a few spot markets on Binance are zero fee, so someone can theoretically trade with themselves back and forth to pump volume. I think quite a few third party volume trackers stopped tracking those markets and binance also stopped counting those markets for fee tiers for this reason.

Not if you rebate back to yourself the fees from your own trading.

Is that some insider knowledge?

From what i know Coinbase has consumers worldwide and they are able to verify gov issued documents from many countries, including as far as Japan, well not anymore, at least since today.. :p

Binance can't operate in the US like Coinbase, that's why they have Binance US which is pretty small. FTX was setup similarly. https://coinmarketcap.com/rankings/exchanges/

Turns out it’s hard to attract enough volume when you’re operating by the book in an unregulated market where everyone else is playing against the customers on their money, often outright stealing it.

But also not surprising given that 95% of the use cases are totally illegitimate.

Only about 0.15% of crypto transactions last year were illicit, compared to 5% with fiat money. Cash is by far the pinnacle of "crime money", definitely not cryptos.

https://blog.chainalysis.com/reports/2022-crypto-crime-repor...

The study says 0.15% of transactions involved addresses that have been identified as illicit. That’s quite different to saying 0.15% of transactions are illicit and very different to saying 0.15% of the value of crypto transactions was illicit.

> compared to 5% with fiat money

Sorry, what?

That’s a laughable estimate. And even if that were the case, speculation comprises the other 94.85%— also illegitimate—. A result of regulatory capture and complicit politicians.

They did a direct listing instead of an IPO, meaning all the employees sold a bunch of shares to retail investors and the company made no money in the IPO. It could have shored up its coffers a lot with an IPO, but its unlikely that institutions were that interested in underwriting it at that valuation and taking the risk, accurate analysis of risk because then they'd be holding the bag, sort of:

This also means that there was no "stabilizing bid", a feature of IPOs where there is a window of time where this form of market manipulation is legal, the participating banks put up super large buy orders around the IPO price to suggest there is more demand than there is. Coinbase listing didn't have that.

Coinbase just needs to downsize what they're trying to do.

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