Did Coinbase Fail? Did Bitcoin Crash?

Review

Some of you may remember that I wrote the article a while back, Is Coinbase Why Bitcoin Is Crashing? as many people were claiming that Coinbase was insolvent due to the Ethereum Classic mess. I pointed out that assertions four and five below this were at best assumptions that were more than likely false:

• GDAX assumed no one would want ETC.
• GDAX didn't have any ETC because they didn't think there would be demand.
• GDAX then saw demand for ETC and users begin requesting their ETC too.
• If GDAX doesn't offer ETH buyers ETC - since that was in the realm of possibilities and other exchanges did - some users may sue.
• GDAX needs to now purchase ETC live on the market place with funds it may not have.
• Evidence is that Coinbase has raised fees.

I was right and I write this not to gloat, but to remind everyone that we need to think clearly about what we're saying, writing and asserting. Let's not be quick to rush into assumptions during periods of turmoil because it only amplifies the mess. Coinbase was not in trouble during this time - you may argue that it's in trouble later, but during this period, this is incorrect. People who were rushing to sell bitcoin were foolish and it offered a great opportunity to buy both bitcoin and ether very cheap.

Coinbase Raises Fees

A few people annoy me on this point and it's generally a complaint of people who don't grasp business and solvency; if a business that you enjoy doesn't make enough money to cover itself, it won't last. If Coinbase needs more fees to offer bitcoin, ether, and other products, as well as insure those products, I'm good with that. Go ahead and join a cheap exchange where you will face a loss if hacked because there's no insurance; I don't like that and I would bet that people who value their time and money are willing to pay a higher cost for higher value. You don't get good value for free; if you expect everything for free, don't be surprised when you get cheap results.

I am very glad Coinbase raised its fees; it's about time. This, to me, is a positive sign.

Conclusion

The major technical lessons to this are that cool heads will always prevail throughout a storm and people who identify the problems without assumptions will always win in the long run. If you don't have evidence, should you act on your assumptions? I say, let's be wise and act only on what we know. As for markets that fall, to quote Sir Isaac Newton, for every action, there is an equal and opposite reaction. For everything that rises, it too will eventually fall; and for everything that falls, it too will eventually rise.