Disillusioned Traders Seek Coinbase Alternative After Recent Crash

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Disillusioned Traders Seek Coinbase Alternative After Recent Crash

Recent outages on US exchange Coinbase have motivated disgruntled traders to do two things: criticize the San Francisco-based platform on Crypto Twitter and seek a viable alternative. Last week, bitcoin broke the $10,000 barrier only for Coinbase to crash just as the price crept towards this psychological level it’s tested so frequently of late. Cue widespread censure and condemnation in the community, followed by a hasty blog post by software engineer Michael de Hoog, explaining that the exchange’s autoscaling was unable to keep pace with a dramatic five-fold increase in traffic.

Excuses are all well and good, but they don’t cut muster with cantankerous traders who’ve encountered this problem before. In the past three months, Coinbase has gone offline no less than four times. And it’s not the only PR hit the company has taken lately: news that it is selling surveillance software to the US government has caused many users to ditch the platform

From an Open Service to Full KYC

For some users, it’s the final straw and the predictable endpoint of Coinbase’s transition to being a government puppet as they perceive it. A typical response to Coinbase’s move to a KYC model was posted on the Bitcointalk forum in late 2018, with BitHodler remarking “It surprises me that it took this long for them to come up with these measures. Coinbase was an open service that allowed people to deposit and withdraw at any time without any questions asked.

“I have been using Coinbase in all freedom for quite some time and that’s over now. Maybe it’s a good thing with how it forces people to take care of their own storage from now on.”

Despite the criticism, Coinbase has over 30 million users, with eight million signing up between mid-2018 and mid-2019. The fallout from the recent crashes will only become clear when and if new users numbers are publicized, though claims that the exchange “seems to be programmed to go offline anytime there’s a $500+ move in bitcoin’s price” aren’t doing it any favors.

Six of the Best Coinbase Alternatives

There is no shortage of Coinbase alternatives for those looking to make a switch. bitFlyer USA is just one of them. Launched in late 2017, the user-friendly platform operates in 47 states and territories and lets users link up their bank account and buy bitcoin with USD. It also features a Lightning Pro exchange for more advanced users, built by Wall Street veterans. bitFlyer USA currently supports bitcoin, ethereum, ethereum classic, litecoin and bitcoin cash.

Derivatives and spot exchange headquartered in Singapore, Phemex was launched in November by a team of ex-Morgan Stanley brokers and offers perpetual contracts (futures without expiry dates) on assets including bitcoin and ether, at 100x leverage. Phemex recently announced a Premium subscription program that provides spot trading with zero fees for as little as 9.99 USDT a month, and its trading engine is capable of handling 300,000 transactions per second, with order response times of less than 1 millisecond.

Binance, meanwhile, is the world’s top crypto exchange by trading volume, handling over $2 billion worth of transactions a day. It can support over 1.4 million transactions per second. One of Coinbase’s main competitors, Binance launched its US arm last September and supports USD fiat pairs. With spot trading, fiat on-ramps, crypto loans, futures with 125x leverage and a DEX, Binance is well worthy of your consideration.

Deribit is the world’s largest exchange by options trading volume and enables users to trade bitcoin and ethereum with up to 100x leverage. The caveat is that only BTC is accepted for deposits. Based in Panama, Deribit is a decent option for more seasoned traders. Reassuringly, its incremental liquidation and risk management system has suffered zero instances of socialized losses since it launched in 2016.

For those craving the peace of mind that comes from using a long-established platform, Bitstamp is the gold standard. Principally because it opened its virtual doors in 2011. Having onboarded over four million users, the London-headquartered platform combines ease of trading with top-tier security, though admittedly it suffered a 4.5 hour outage on April 25. Following that, reviews were carried out to resolve the issues and ensure all systems were functioning as normal. Bitstamp supports bitcoin, ethereum, litecoin, ripple, and bitcoin cash.

Yet another option for traders fleeing Coinbase is Gemini, the world’s first SOC 1 Type 1 and SOC 2 Type 1 and 2 certified crypto exchange and custodian. Like Coinbase, it’s based in the United States and provides a suite of trading tools for novices and more advanced users. With support for 22 trading pairs and free deposits/withdrawals, Gemini is a safe bet and proves especially popular with institutional investors.

Clearly Coinbase isn’t the only show in town. If you’ve become disillusioned with the platform, there’s nothing stopping you from taking your business elsewhere. While all exchanges are likely to have a bad day now and then, when you’ve lost faith, it’s time to roll out.

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Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Author: Casper Brown
I am an associate content producer for the news section of Coingape. I have previously worked as a freelancer for numerous sites and have covered a dynamic range of topics from sports, finance to economics and politics.
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Casper Brown 249 Articles
I am an associate content producer for the news section of Coingape. I have previously worked as a freelancer for numerous sites and have covered a dynamic range of topics from sports, finance to economics and politics.
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