Daily Bit #177: A Bootstrap State of Mind
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A Bootstrap State of Mind

It’s been less than three months since OkCoin landed on U.S. soil, though the exchange has already broadened their bandwidth to an additional 20 states beyond their California HQ.

Prior home: China. OkCoin was booted from the country alongside Huobi in October ’17 after the PBoC draped an iron curtain over domestic crypto exchanges. Huobi broke into the US through their SF-based partner, HBUS, and OkCoin tailed shortly after.

A U.S. expansion is a big deal. It signifies that platforms are willing to tack-on regulatory baggage in exchange for breaking into new markets. And new markets = faster growth = more cash to OkCoin’s war chest for future maneuvers.

Eyes on the prize(s): volume & fees

Thanks to their expansion, OkCoin’s trade volume is ready for launch. Current volume per Coinmarketcap is roughly $700k per day, but that’s only for Cali. All five currencies are paired to USD; new states must use Tether or TrueUSD until OkCoin gets a nod for fiat-to-crypto trading.

Now, remember… one does not simply onboard new users. OkCoin is barreling into a dragon den occupied by Coinbase and Gemini, whose respective ~$165M and ~$31M in daily trade volume isn’t about to get packaged into a welcome basket.

The answer? Slash fees — heavy. And OkCoin’s promotion gives them a heady edge over maker and taker rates offered on both platforms for certain price levels. Fees are based upon 30-days of trading volume.

Taker fees (market-orders):

- Coinbase, under $10m (0.30% flat vs 0.15% max)

- Gemini, under $5m (0.25% [min] vs. 0.15% max)

Maker fees (limit-orders):

- Coinbase, above $1m (both charge 0.0%)

- Gemini, under $15m (0.10% [min] vs. 0.05% max)

The bottom line: There’s no guarantee that OkCoin will keep retail & institutional investors around for a long time, but they can offer them a good one while their cheaper fees stick around… as long as their lower liquidity levels aren’t a dealbreaker.
['Daily Bit']
['Fintech', 'Blockchain', 'Blockchain Technology', 'Cryptocurrency', 'Bitcoin']