Coinbase intends to launch a subscription service, users can conduct commission-free transactions after subscribing
Coinbase (COIN.US) is testing a subscription service that allows users to conduct commission-free transactions on the largest cryptocurrency exchange in the United States, that is, no commission is required for each cryptocurrency transaction. It is understood that after customers subscribe to the service, they still need to pay the difference between the sale and purchase of cryptocurrency. Before subscribing to the service, Coinbase customers still need to pay transaction commissions and spread fees. The company has not disclosed the specific subscription fees.
Coinbase said in a statement issued on Wednesday local time: “We have been actively exploring how to provide the best service to our customers in different ways.” “At present we are still in the early stages, so everything related to future product experience will depend on it. Because of the feedback we get from users.”
Due to the increasing competitive pressure brought by companies such as Robinhood (HOOD.US), Coinbase is testing the adjustment of its fee structure. Robinhood created a trading model that does not charge trading commissions and quickly gained a large number of new users. According to statistics, cryptocurrencies currently account for more than half of Robinhood’s trading revenue.
Oppenheimer analyst Owen Lau said that subscriptions can help Coinbase’s profitability be more predictable. Coinbase’s failure to provide clear performance guidance is largely due to the unpredictability of its revenue and is often linked to Bitcoin prices and market sentiment. Make performance not sustainable.
Owen Lau said: “This will greatly reduce the high volatility of the company’s future earnings.” “In my opinion, this is a positive factor for large-scale expansion. Transaction volume is often highly unpredictable. The revenue comes from transaction costs, but it has been working hard to expand ways to diversify revenue.”
It is understood that Coinbase will announce its quarterly results after hours on November 9. Analysts generally expect the company’s third-quarter revenue to experience a double-digit quarter-on-quarter decline. The reason is that the price of Bitcoin plummeted in the second quarter, resulting in a decrease in transaction volume and active users in the third quarter. Analysts currently generally expect the company’s third-quarter revenue to be US$1.58 billion, a drop of nearly 30% from the previous quarter, and earnings per share are expected to be US$1.72.
Owen Lau said that Coinbase can first provide subscription services to some low-frequency trading users to ease the pressure on the company’s revenue growth. “If you try to ask users with frequent transactions, the company will lose a lot of transaction fees. I believe Coinbase will slow down and try to pilot the service first to see if the subscription fee is reasonable.”