The United States-based cryptocurrency exchange Coinbase is removing dozens of trading pairs to improve liquidity on its platform.
Coinbase has decided to suspend 80 non-USD trading pairs, which include cryptocurrencies like Bitcoin (BTC), stablecoins like Tether (USDT), and fiat currencies like the euro. The goal of this move, according to Coinbase, is to enhance the overall market health and consolidate liquidity. The removal of these trading pairs took place on October 16 at 19:30 UTC, affecting not only the Coinbase exchange but also other platforms such as Advanced Trade and Coinbase Prime.
It’s important to note that this decision aligns with Coinbase’s previous announcement in early October regarding the suspension of certain markets. However, affected platform users can still trade these markets using Coinbase’s more liquid USD Coin (USDC) balances.
Coinbase clarified that the removed markets accounted for an insignificant portion of its total trading volume.
Improving Liquidity Through Trading Pair Removals
Removing trading pairs to improve liquidity has become a regular practice for Coinbase. In mid-September, the exchange eliminated 41 non-USD markets for similar reasons. Although several USDT-containing trading pairs were removed, none of the suspended markets included USDC, which is a stablecoin jointly developed by Coinbase and Circle.
Challenges Faced by Coinbase and Other Major Exchanges
Coinbase’s efforts to enhance liquidity come amidst a decline in its trading volumes this year. CCData, a cryptocurrency market data provider, reported a 52% decrease in Coinbase’s spot trading volumes for Q3 compared to last year.
Binance, another major cryptocurrency exchange, has also experienced a drop in its spot market share dominance throughout the year. According to CCData, Binance’s spot market share fell for the seventh consecutive month in September 2023, declining from 55% in early 2023 to 34% in September 2023.
Hot Take: Coinbase Takes Steps to Improve Liquidity by Removing Trading Pairs
Coinbase’s decision to remove trading pairs is aimed at improving liquidity and consolidating the market. By suspending non-USD markets, including popular cryptocurrencies like Bitcoin and stablecoins like Tether, Coinbase hopes to enhance overall market health. These removals align with the exchange’s previous plans and will not significantly impact Coinbase’s total trading volume. Other major exchanges, such as Binance, have also faced challenges in maintaining their spot market dominance. Coinbase’s efforts to improve liquidity come at a time when its trading volumes have declined. Overall, these measures reflect Coinbase’s commitment to ensuring a healthy and liquid market environment for its users.
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