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- Coinbase eradicates 80 non-USD trading pairs, including notable cryptocurrencies and fiat currencies.
- The objective is to consolidate liquidity and enhance overall market health.
Prioritizing Market Health: Coinbase’s Strategic Move
Coinbase, a renowned cryptocurrency exchange based in the United States, has embarked on an assertive mission to refine its platform’s liquidity. A significant step in this direction is the recent suspension of 80 non-USD trading pairs, a move that encompasses major cryptocurrencies such as Bitcoin and stablecoins like Tether, in addition to fiat denominations like the euro.
In an announcement made on October 16th, Coinbase elaborated on its intent, pinpointing the goal to
“amplify overall market health and fortify liquidity.”
These trading pairs were systematically removed from various platforms under the Coinbase umbrella, including Advanced Trade and Coinbase Prime, at precisely 19:30 UTC on the same day.
As part of its proactive measures to maintain a streamlined trading environment, this decision was congruent with Coinbase’s earlier announcement in early October, wherein it had laid out plans to suspend certain markets. Nonetheless, Coinbase has assured its user base that trading in the impacted markets remains feasible through its
“more liquid USD order books,”
leveraging the exchange’s USD Coin (USDC) balances.
It’s noteworthy to mention that the trading pairs in question constituted a relatively insignificant portion of Coinbase Exchange’s overall trading volume. This assertion underlines the fact that while these modifications are substantial in number, their net impact on the daily trading volume remains minimal.
A Pattern of Pruning: Not a New Endeavor for Coinbase
This isn’t a pioneering move for Coinbase in its quest for optimized liquidity. In fact, back in mid-September, the exchange proceeded to remove an additional 41 non-USD markets, attributing this decision to identical liquidity-enhancing rationales. Intriguingly, while several Tether (USDT) associated trading pairs were among the suspended list, no markets featuring the USDC stablecoin, a collaborative venture between Coinbase and Circle, were affected.
This liquidity enhancement initiative assumes greater significance against the backdrop of falling trading volumes observed on Coinbase this year. Data insights from CCData, a crypto market metrics provider, highlight a 52% nosedive in Coinbase’s spot trading volumes for the third quarter as compared to 2022. Such liquidity challenges aren’t exclusive to Coinbase. Binance, another heavyweight in the crypto exchange domain, has also witnessed a diminishing spot market share, dwindling from 55% at the start of 2023 to 34% by September 2023.