Jim Chanos on Coinbase: It's not a good business model
- Thread starter The_Krakenite
- Start date
Is it true that the commission is that high?
I always had the impression that crypto trading commission is very cheap
I always had the impression that crypto trading commission is very cheap
I never used coinbase, but can assure you it has quite high commissions. It's an old legacy system, that hasn't modernized to the times, despite a lot of empty hot-air from the CEO which was busy selling off his stocks so he could buy a mansion instead.
I use mostly Canadian brokerages, which charge basically nothing. Even Questrade allows you to purchase crypto ETFs (and all other ETFs) free of fees. But you pay commissions if you sell those ETFs down the road.
I use mostly Canadian brokerages, which charge basically nothing. Even Questrade allows you to purchase crypto ETFs (and all other ETFs) free of fees. But you pay commissions if you sell those ETFs down the road.
He nailed it until he made the leap that you can extrapolate Coinbase expenses to the "entire crypto universe". That's beyond absurd. Most crypto is tightly held and not traded. No way would he take this enormous leap of faith in logic with his other analysis. He's not that stupid. But he's expecting you will be stupid enough to fall for it. He's talking his book.
Both of these statements are incorrect. You can read about their business in their EDGAR filings. Should be an eye opener for ya.
Yeah net income at the June earnings was -1B, that is a billion lost in a quarter. But wait, what about the March earnings? They only lost -430 MM, so that is better.
A casino/broker should make money in both an up AND down market. Not only make money when the crypto prices are going up. Should be an eye opener for you.
Yeah net income at the June earnings was -1B, that is a billion lost in a quarter. But wait, what about the March earnings? They only lost -430 MM, so that is better.
A casino/broker should make money in both an up AND down market. Not only make money when the crypto prices are going up. Should be an eye opener for you.
Correct. So you have proven to yourself they are not a casino and your first statement was incorrect. Let's review your two claims:
1 - "So Coinbase is a casino."
2 - "A casino/broker should make money in both an up AND down market."
Coinbase does not have a sustainable business model right now. They will clearly undergo significant changes, one of which might be going out of business. I don't care and have no position long or short.
But seriously, you never heard of a badly ran casino? Look up trump's adventures.
1. Coinbase is a casino for crypto traders, nevertheless they can't make money in down markets.
2. This proves that their profits (or lack of it) come from other businesses, like lending money out to bad business (DeFi, NFTs) or themselves trading crypto (badly).
Didn't watch the video but Chanos may have meant that other crypto brokers are doing the same (and also losing money in a down market).
1. Coinbase is a casino for crypto traders, nevertheless they can't make money in down markets.
2. This proves that their profits (or lack of it) come from other businesses, like lending money out to bad business (DeFi, NFTs) or themselves trading crypto (badly).
Didn't watch the video but Chanos may have meant that other crypto brokers are doing the same (and also losing money in a down market).
Binance has absolutely been killing it from the start. It is a very different business than Coinbase yet it is also a crypto exchange. You have to dig into their business models to understand what is going on. Coinbase isn't failing because some people use crypto for gambling. Cryptocurrencies are complex and truly revolutionary technology. Coinbase just has a business model that, imo, is based on the past and not what is coming.
The speculative aspects and market value of crypto currencies seem to get all the attention. For many that is all they know about crypto. But there is real technology under the hood that solves real problems. Use it for speculating if you want but it sure was not made for that.
The speculative aspects and market value of crypto currencies seem to get all the attention. For many that is all they know about crypto. But there is real technology under the hood that solves real problems. Use it for speculating if you want but it sure was not made for that.