Coinbase testing a new subscription for commission-free bitcoin trading

Coinbase is one of the most popular exchanges on which to buy and sell bitcoin and other cryptocurrencies. The company enjoyed massive success this year thanks to the exploding popularity of bitcoin and other digital assets. Coinbase went public earlier this year and announced new initiatives for customers in recent months. One of them is the lending product that Coinbase eventually had to abandon. But that’s not the only exciting new product coming out of the exchange. Coinbase is currently testing a subscription service that will let customers trade bitcoin and other digital tokens without paying a commission to Coinbase. Coinbase could include additional perks like 24/7 customer support and insurance against hacks in the Coinbase One product.

The Coinbase One subscription

A few weeks ago, Bitcoin reached a new all-time high, nearing $67,000 per coin after a slump that lasted a few months. The previous record came in mid-April. That’s to say there’s renewed enthusiasm and plenty of interest in the cryptocurrency space. It’s not just bitcoin that’s shattering records, as other digital tokens reached new highs. And some scams emerged along the way.

Coinbase is a place where traders can safely buy and sell tokens, but they have to pay a commission to Coinbase for each transaction. That might change in the future if the Coinbase One subscription program is successful.

The Block first reported on Coinbase’s new pilot program. The company is yet to make the subscription service available to all of its customers but has confirmed the tests:

Coinbase has started testing a subscription product for our customers. Customers in the test group will have the ability to buy, sell, and convert digital currencies on the Coinbase platform without a Coinbase fee for each trade (spread fees still apply). We’re always looking to learn more about how we can best serve our customers in different ways. Right now we are still in early stages so everything about the future product experience will be shaped by the feedback we receive from our users.

People who conduct a lot of trades on the platform might find that paying a monthly subscription might be a better deal than paying fees for each transaction.

The other perks

People who conduct a lot of trades on the platform might find that paying a monthly subscription might be a better deal than paying fees for each transaction. But the Coinbase One price hasn’t been disclosed. It’s unclear what Coinbase would charge customers each month. On the other hand, Bloomberg notes that analysts expect Coinbase to target customers who don’t trade as much, to protect its revenue from those who conduct a lot of trades on the platform.

But the subscription service will come with additional perks. Subscribers will get prioritized phone support “even on holidays and weekends.” More interestingly, Coinbase One will provide a safety net against hacks. Hackers routinely target individuals looking to steal their crypto holdings. A screenshot of the Coinbase subscription program indicates that the company will reimburse some losses:

If any funds in your Coinbase account are stolen by someone you don’t know due to an account takeover, you may be eligible for a reimbursement of up to $1 million in losses.

Going after Robinhood?

Dropping fees in favor of a subscription might make sense when it comes to competing against Robinhood. The exchange already offers commission-free trading and a monthly subscription called Robinhood Gold that offers buyers additional perks. But Bloomberg explains that there might be a different reason for the Coinbase subscription to exist.

A subscription model would bring more predictability to Coinbase. The exchange can’t issue forward guidance to investors because its revenue fluctuates. The more users trade on the platform, the more money it might make. But the high volatility in the crypto space means no two days are alike, let alone an entire quarter. The upcoming earnings call might reflect that.

Analysts expect the company to report a double-digit sequential decline for the third quarter that followed a drop in trading. That’s because bitcoin and the entire crypto ecosystem went through a slump during most of the July-September quarter.