Coinbase BTC (CBBTC)

Use Cases of Coinbase BTC

Coinbase BTC, specifically through Coinbase Wrapped BTC (cbBTC), allows users to use their Bitcoin in new ways on different blockchains. It is an ERC-20 token backed 1:1 by Bitcoin held by Coinbase. This enables users to:

• Provide Bitcoin as liquidity to decentralized finance (DeFi) protocols.
• Use Bitcoin as collateral to borrow other crypto assets.
• Seamlessly move Bitcoin onto blockchains like Base and Ethereum for faster and cheaper transactions.
• Participate in various DeFi applications, NFT marketplaces, Web3 social apps, and gaming platforms that benefit from blockchain access.

By converting BTC to cbBTC, users gain more flexibility and access to innovative financial services beyond traditional Bitcoin transactions.

Fees

Coinbase BTC has higher and somewhat confusing fees compared to other exchanges. Fees vary based on payment method, order size, and market conditions. Buying with a connected bank account offers lower fees (around 1.87%), but debit card purchases can have fees over 4%. Coinbase Pro offers lower fees (0% to 0.5%), but other exchanges like Kraken or Binance may have even lower fees.

User Experience and Features

Coinbase BTC is beginner-friendly with a simple interface and supports over 250 cryptocurrencies. It offers features like staking, spot and margin trading, and a native NFT marketplace. Coinbase Wallet allows users to self-custody crypto and access decentralized apps. Coinbase One subscription offers zero-fee trading and priority support.

Security and Regulation

Coinbase BTC is considered very secure, using cold storage and insurance policies for cash balances. It is licensed and regulated in multiple countries, including the US and UK. Institutional clients can use Coinbase Custody for secure asset storage.

Control and Privacy

Users do not have full control over their wallets on Coinbase BTC, as private keys are held by Coinbase. This limits autonomy compared to self-custody wallets. There are also privacy concerns and some allegations related to money laundering investigations.

Customer Service

Customer support has received poor reviews, with complaints about slow responses, account lockouts, and difficulty reaching live help. Coinbase has a low rating from the Better Business Bureau.

Liquidity and Trading

Coinbase BTC offers high liquidity and a wide range of trading pairs, including fiat and stablecoin pairs. It supports advanced trading options but does not yet offer crypto perpetual trading for individual US traders.

Summary

Coinbase BTC is easy to use, secure, and offers many cryptocurrencies and features, making it good for beginners and advanced users. However, it has higher fees, limited wallet control, and customer service issues.

Founders of Coinbase BTC

• Brian Armstrong: A former Airbnb engineer who founded Coinbase in June 2012. He was the first CEO and played a key role in the company's growth and vision to make buying and selling cryptocurrencies simple and accessible.

• Fred Ehrsam: A former Goldman Sachs trader who co-founded Coinbase with Brian Armstrong after connecting through Reddit. Ehrsam served as the first President of Coinbase and contributed to its early development before leaving the company in 2017 but remaining on the board.

• Ben Reeves: Initially intended to be part of the founding team but left before the Y Combinator funding round due to differing views on the Coinbase wallet's operation.

The main founders are Brian Armstrong and Fred Ehrsam, who started Coinbase in 2012 to create a platform for cryptocurrency trading and storage.

Early and Venture Investors

Coinbase BTC has attracted early investments from venture capital firms such as Union Square Ventures and Andreessen Horowitz. Union Square Ventures invested early in 2013, which has grown into a stake worth billions today. Other notable investors include Breyer Capital, Circle Ventures, and Coinbase Ventures itself, which invests broadly across crypto and Web3 projects.

Institutional Investors

Institutional investors like asset managers, hedge funds, and banks use Coinbase BTC through Coinbase Institutional and Coinbase Prime services. These investors include regulated digital asset managers such as Aspen Digital from Abu Dhabi. Cathie Wood’s Ark Invest is also a significant institutional investor, holding over $500 million in Coinbase shares across its ETFs.

Public and Retail Investors

Coinbase is a publicly traded company with a large number of shares held by public companies and retail investors, accounting for about 44.6% of shares. This reflects broad participation from everyday investors alongside institutional players.

Coinbase Ventures

Coinbase Ventures is a venture capital arm that supports early-stage crypto projects and has invested in hundreds of teams building blockchain infrastructure, DeFi, NFTs, and more. It works with accredited and institutional investors to fund innovative crypto startups.

Summary

• Early venture capital: Union Square Ventures, Andreessen Horowitz, Breyer Capital, Circle Ventures
• Institutional investors: Aspen Digital, Ark Invest (Cathie Wood), various banks and asset managers
• Public and retail investors: significant shareholding in Coinbase stock
• Coinbase Ventures: invests in early-stage crypto and Web3 projects

Coinbase BTC Halal Status

• Investment in Coinbase Global Inc (COIN) stock: No, it is generally considered not halal or Shariah compliant due to its business model and financials, as per multiple screenings (Muslim Xchange, Musaffa, Halal Investors). The company’s involvement in interest-bearing activities and other non-compliant factors make its stock non-halal.

• Using Coinbase BTC platform to buy crypto: Yes, using Coinbase BTC to buy and sell halal cryptocurrencies like Bitcoin (BTC) is generally considered halal. Coinbase acts as a broker or marketplace facilitating transactions, and many scholars view spot trading of established coins like BTC as halal.

• Crypto itself (e.g., Bitcoin): Yes, Bitcoin and similar well-known cryptocurrencies are widely regarded as halal by many Islamic scholars because they represent ownership of assets without interest (riba) and have real-world utility.

In summary, investing in Coinbase BTC stock is not halal, but buying and trading Coinbase BTC (the cryptocurrency) through the Coinbase platform is considered halal.