Coinbase Pro Announces New Market Structure

In a blog post on March 15, one of the biggest cryptocurrency exchanges in the United States, Coinbase, announced that it has created a new market structure for Coinbase Pro, its professional trading platform.

Improving Performance

According to the announcement, the new structure had been created to increase liquidity, ensure smoother price movements and improve price discovery.

The changes to the market structure included introducing a new fee structure, which had been designed to increase the liquidity in the market, the sizes of new order increments and updated order maxes.

This new market structure would also turn off stop-market orders as well as adding protection points for market orders.

The post also stated that both the exchange’s trading platforms, Coinbase Prime as well as Coinbase Pro, would discontinue support for stop market orders. Going forward, all stop orders would need to be submitted instead as limit orders and would also need to include a limit price.

The addition of market order protection points would be made to both Coinbase’s trading platforms. It would total up to 10% of all market orders. The post explained that those market orders that moved the price of an asset more than 10% would stop executing and would instead return a partial fill.

Finally, the announcement also warned its users that its platforms would be offline from 6:00pm PTD to 6.30pm PTD on March 22.

Reaction from the Market

The announcement did not receive a warm welcome. It was met with both negativity and skepticism from the online community on social media.

According to trader and economist Alex Kruger, Coinbase Pro had actually raised fees for smaller clients by a massive 33%, but had reduced its fees for the bigger clients. Kruger went on to state that in a local world, most clients of Coinbase would move their business to Binance now.

Kruger continues his scathing review about the new market structure and Coinbase. He raised questions about the exchange’s decision to cease offering support for stop market orders. He stated that stop-limit orders occasionally did not happen due to slippage. His suggestion was to use far-off limits on such orders to prevent this from occurring.

Despite his criticism of the new changes, Kruger did agree that the changes that Coinbase had made to its marketplace would, indeed, lead to increased liquidity as well as activity in trading.

Another cryptocurrency trader also took to Twitter and implied that the new market structure seemed to be targeted at new users who were just entering the cryptocurrency sector. He wondered whether Coinbase was anticipating a turnaround in the market and was preparing for it.