Coinbase will start charging a 0.1% net conversion fee of more than $5 million in 30 days as cryptocurrency exchanges struggle with their earnings lately.
Starting August 13, Coinbase will charge USDC (USDC) more than $5 million in conversion fees over a 30-day rolling period – its net amount calculated by deducting USDC purchases from USDC sales, according to the online sharing notice.
This is after Coinbase shared last week’s second-quarter results, lack of revenue and revenue, making its stock tumbling. However, with stable revenues rose 12% year-on-year to $332 million.
The company missed analyst expectations for two consecutive quarters as its first-quarter revenue also fell below expectations.
Coinbase “running experiments”
“I don’t like the precedent here,” said Ryan Sean Adams, the shoreless co-founder, in X postal Share updates to Coinbase. “If this drops to $10,000, it feels like a bank fee.”
Will McComb, Senior Product Manager, Stablecoins at Coinbase, answer In the post, the communication is experimenting with how the fees will affect the USDC conversion.
“We are doing an experiment to better understand how the fees affect USDC off-road vehicles, especially when some competitors charge higher fees to return to Fiat,” McComb said.
“Hearing your point is a core feature and we are carefully monitoring all feedback. We are committed to making sure Coinbase is the best place to use Stablecoins.”
Currently, Coinbase does not TOLL In a 30-day period, USDC’s net conversion costs were as high as $40 million. The expenses then went from $40 million to $100 million to 0.05% and expanded to a maximum conversion rate of over $200 million to 0.2%.
Fees to eliminate tethers to USDC conversion
Some commentators speculate that the move may cover the expenses incurred by the company in managing the USDC (the second largest stable stock by number).
Others, such as crypto influencer Jordan Fish, who is “Bryant” explain The fee may be to stop user arbitrage from converting Tether (USDT) to USDC to convert free to USD, which is reducing USD supply.
He said: “There is an exit fee for the tether, which means the cheapest actual route is to exchange USDT to USDC and then switch the span USDC to USD, which will reduce the supply of USDC and maintain USDT.
Coinbase CEO Brian Armstrong agree By Fish’s comment, answer with a simple “yes”.
Tie the rope Accusation The fee is 0.1% or $1,000, whichever is higher, with a minimum exchange value of $100,000.
USDT’s market cap grew 20% from the beginning of the year, while USDC’s market cap grew 47% during the same period, according to Go to Defilama.
Bloomberg ETF analyst James Seyffart explain The co-case could incur costs and the company is now passing.
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“It feels similar to the creation/redemption fee of ETFs. If they actually have to promote and redeem USDC in a way, people who (possibly) incur some kind of cost to do it,” Seyffart said.
He added: “My guess is that they are uninstalling the fees…and some.”
Coinbase missed income
New fees appear as Coinbase Missed analyst earnings estimates For the quarter ended in June. The company reported revenue of $1.5 billion, while analysts expected revenues between $1.56 billion and $1.59 billion.
The company’s stock sank 8% after reporting its second-quarter earnings report.
In Q1 report, Coinbase saw Total revenue fell 10%although its net income fell by 95% due to unrealized losses in the company’s losses in cryptocurrency holdings.
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