San Francisco-based Cryptocurrency exchange- Coinbase- is dishing out new gears to help newbie crypto users see and understand what veteran traders are up to. An announcement was made by Coinbase on the accessibility of a new set of monitoring tools. One tool from the set records and shows the activity of Coinbase’s top traders.
First Time Crypto Trader Insight
According to an official Coinbase blogpost, it was revealed that the top holder activity indication is the percentage of Coinbase customers with large balances of an asset (top 10%) who have net increased (bought) or decreased (sold) their positions in that asset through trading over a period of 24 hours. An official Coinbase blog post explained. This is updated approximately every 2 hours. A spokesperson for Coinbase also revealed that top holder activity would be accumulated from all individual Coinbase accounts across the exchange – not including those set up by institutions.
The cryptocurrency exchange firm will also provide information to enable traders make better, more informed decisions in addition to sharing top user metrics. Users of the exchange will also have access to the average number of days an asset is held by traders on the exchange before being sold or moved to another address. Another tool from the set measures the status of assets on Coinbase, as well as relative price correlations to other crypto assets. Interestingly, Coinbase revealed that all these exclusive data tools for crypto enthusiasts are available to any registered user for free.
Coinbase’s spokesperson while describing the aim behind introducing these new tools revealed that for individual stakeholders, particularly those new to crypto, the exchange platform hopes that these new signals will encourage more informed management of a diversified crypto portfolio. It was also revealed that the platform introduced trading signals to help first-time investors build the right portfolio to suit their investment goals. A senior engineer in Coin base- Will Drevo- has also revealed that as a result of early analysis carried out with these tools, says Coinbase’s top crypto accounts will tend to buy rather than sell their portfolio positions.
Is This The Right Move For The Industry Right Now?
Many would agree that first time Coinbase users aren’t always knowledgable in the crypto space. Generally speaking, word gets around from friends that Coinbase is the spot to purchase cryptocurrency. Coinbase is essentially creating an environment where first time investors can sign up and essentially copy others in the investment space. With the space being so young, we would argue it might not be the best direction at this time. Despite Coinbase taking a lot of initiative in the education space, we believe education needs to be pushed before automated services like these go into play. If people with little knowledge between differences of Bitcoin and Blockchain are essentially signing up and copying others, it probably isn’t the healthiest thing in a community where its already difficult to understand this emerging asset class. Time will tell if this move by Coinbase will be beneficial or not. You could have an environment where people are utilizing more tools which fuels them to learn, or you can have an environment where these tools are just utilized to help them feel more comfortable about a speculative investment.
Engineers Share Their Thoughts
In a blog post, the senior engineer revealed that factually, when top holders are either unusually bullish or bearish this has been indicative of shifting market conditions, but not at all times. He wrote that in summary, leveraging a strictly signal-based investment strategy, is not always advantageous to traders and should not be taken directly as investment strategy or advice. To a certain extent, users are encouraged to create and manage their own crypto strategy grounded on a user’s own needs, financial means and risk tolerance. He advised that if traders doubt a particular transaction, they should consider consulting a financial professional.
In April, Coinbase unveiled a cryptocurrency debit card for its UK users. Afterward, in June, the company announced its rollout to more European countries, notwithstanding users complaining about several issues. The San Francisco based cryptocurrency exchange platform, is valued at over $8bn and is regarded as one of the longest-serving companies in the cryptocurrency space.