What's Happening?
The popular United States-based cryptocurrency exchange Coinbase has decided to suspend 80 non-USD trading pairs in an effort to enhance liquidity on its platform. This includes trading pairs with cryptocurrencies like Bitcoin (BTC), stablecoins like Tether (USDT), and fiat currencies like the euro.
Why is Coinbase Doing This?
According to an announcement made by Coinbase on October 16, the removal of these trading pairs is part of the exchange's strategy to improve the overall health of the market and consolidate liquidity. The trading pairs were removed from Coinbase as well as other platforms such as Advanced Trade and Coinbase Prime.
What Does This Mean for Users?
Users who were trading these pairs can still continue trading in Coinbase's more liquid USD order books by using the exchange's USD Coin (USDC) balances. Coinbase made it clear that the suspended markets only make up a small portion of its total trading volume.
Is This a New Trend for Coinbase?
No, Coinbase has been taking measures to improve liquidity for some time now. In mid-September, the exchange removed 41 non-USD markets for similar reasons. However, it's worth noting that none of the suspended markets included USDC, a stablecoin co-developed by Coinbase and Circle.
Why is Coinbase Focusing on Liquidity?
These ongoing efforts by Coinbase to enhance liquidity come as the exchange's trading volumes have seen a significant decline this year. According to CCData, a cryptocurrency market data provider, Coinbase's spot trading volumes for the third quarter of this year dropped by 52% compared to 2022.
Is Coinbase the Only Exchange Affected?
No, other major cryptocurrency exchanges like Binance have also experienced a decrease in spot market share dominance this year. CCData reveals that Binance's spot market share fell for the seventh consecutive month in September 2023, dropping from 55% in early 2023 to 34% in September 2023.
Overall, Coinbase's decision to suspend these non-USD trading pairs is aimed at improving liquidity and market health on its platform. Users can still trade in the more liquid USD order books using USDC balances, and this move is part of the exchange's ongoing efforts to address the decline in trading volumes.
