By
Temitope Olatunji
April 18th, 2024
Coinbase is confident in its decision to boycott Bitcoin Cash, and investors do not anticipate any harm to exchange’s potential unicorn status.
The world of cryptocurrencies is not exactly a calm place, especially now, when Coinbase’s customers threaten to sue the company for Bitcoin Cash putting the exchange in the center of a raging storm.
Being one of the leading and most popular exchanges globally, Coinbase decided not to support the new Bitcoin alter-ego, illegally depriving its users of access to the new version of Bitcoin. The illegitimate nature of the decision can be seen if turn to common property laws, stating that the product of an asset also belongs to the owner of the original asset.
The angry reaction from the side of its customers, who even created a website called Coinbase Bitcoin Cash Lawsuit Portal to organize, and the foreseeable risk of a big loss of clients brings the future of Coinbase into question.
However, Coinbase’s supporters are not afraid and anticipate having no or little effect on the exchange.
Barry Schuler, a partner with DFJ, an investor in Coinbase said:
There’s no one on the board or any investor who doesn’t completely back the point of view that we should err on the side of safety and trust. From an investor’s point of view, we invested in Coinbase because they have made a voluntary commitment to be regulated,” Schuler said, “and to focus on being trusted and safe — as safe as you can be in an experimental environment like this.
Rameet Chawla, Fueled founder, and another Coinbase investor even suggested that Coinbase, thanks to its conservative approach which makes cryptocurrency more accessible to ordinary non-expert folks, might increase the strength of the original bitcoin in the future by establishing faith in the legacy currency.
Prior to the split Coinbase provided a FAQ answer page where it said:
Coinbase will not support the BCC blockchain or digital currency. Any bitcoin within customers’ accounts will remain accessible on the main blockchain only. If you wish to have access to both BTC and BCC, please be sure to send your BTC off the platform by July 31.
As a result, Coinbase users experienced delays of around 12 hours on withdrawals over the weekend due to the number of people moving their bitcoin.
Still, it is suggested that the users who left the exchange are likely only gone temporarily and expect to see many people return to Coinbase while simultaneously storing newly acquired bitcoin cash in a different digital wallet.
In a statement on Twitter Tuesday, Coinbase CEO Brian Armstrong highlighted that the company is not opposed to adding new assets in the future:
Our goal is to be the safest, most trusted and compliant, and easiest to use. Not the first to market with new assets. Especially at scale, it takes time to ensure any new asset we add is well tested and secure.
In other words, Coinbase isn’t quick to take on new currencies:
We have made this decision because it is hard to predict how long the alternative version of bitcoin will survive and if Bitcoin Cash will have future market value
Meanwhile, the new version of Bitcoin, after the succession of surges and drops, is the third largest crypto-currency with market cap making more than $7B and $425,37 coin price at a press time.
A number of Investors including Barry Schuler see the Coinbase’s decision as part of its core business strategy:
The whole cryptocurrency-blockchain space is a bit like the wild west right now — just like the beginning of the internet. But slowly and surely, it’s becoming institutionalized. Coinbase represents that — being legitimate and offering as much trust and safety as possible.