Coinbase redefines its competitors

Author: flowie, ChainCatcher

Yesterday, Coinbase launched the largest product update in recent years, once again setting its strategic goal towards the "Everything Exchange."

The market's focus is primarily on the recently popular U.S. stock products and the newly launched AI investment advisor. However, perhaps more worth discussing is that the competitive landscape for cryptocurrency exchanges has undergone a significant change; more important than challenging Binance is how to challenge Robinhood, and more than challenging Robinhood is who can define the form of the next generation of financial accounts.

Coinbase's Ambition

In mid-last year, Coinbase CEO Brian Armstrong proposed the concept of Everything Exchange, which many at the time thought was a very distant vision. Less than a year later, Coinbase has provided a prototype of the "Everything Exchange."

If we break down this series of products, there is actually one main line: whatever users want to trade, the platform should ideally have it; however users want to trade, the platform should try to cover it; and money should ideally stay within Coinbase.

What is most intuitive to see is the expansion of asset categories.

In addition to cryptocurrency assets, Coinbase has begun to integrate stock and options trading, enhancing its derivatives capabilities through the acquisition of Deribit; it has launched pre-IPO perpetual contracts, allowing users to trade unlisted assets like OpenAI in advance; furthermore, prediction markets and short-cycle event trading are also expanding.

This means that Coinbase is officially transitioning from a "cryptocurrency exchange" to a "full-asset brokerage," directly competing with brokerages like Robinhood, which is also the direction most mainstream cryptocurrency exchanges are expanding towards.

But beyond the expansion of asset levels, there are two changes that are easily overlooked: Coinbase is attempting to explore asset trading methods in the era of AI Agents and the form of "super financial accounts."

The newly launched AI investment advisor, Coinbase Advisor, while not directly executing trades for users, can generate personalized multi-asset allocation and hedging suggestions based on users' holdings and market data.

In the past year, many products exploring AI Agent-assisted trading have emerged. In the future, just as algorithmic recommendations have changed information distribution and user consumption behavior, how will AI Agents influence asset distribution and trading behavior? This remains a question that needs continuous observation.

At the same time, Coinbase's global unified liquidity pool attempts to connect the spot and derivatives systems of the U.S. and international markets, allowing liquidity from different markets to be re-integrated; the Coinbase One Card connects with consumption scenarios like booking.com through stablecoins, and the migration of stock assets is an attempt to gradually incorporate assets that users originally scattered across brokerage systems into Coinbase.

It is clear that Coinbase not only wants to undertake trading behaviors but is also trying to encompass more financial scenarios such as payments, consumption, and investment, and to connect them all, fully transforming towards "trading everything."

Trading Everything is the "Destiny" of Trading Platforms

In fact, "trading everything" has already become a new consensus among trading platforms.

For cryptocurrency exchanges, in the past year, mainstream exchanges have expanded into U.S. stocks, precious metals, and other commodities as well as prediction markets. The focus of competition among cryptocurrency exchanges has shifted from creating assets to competing for the distribution rights of quality assets.

In the past, exchanges could indirectly influence asset supply through listing coins, supporting ecosystems, or even participating in project growth. Hot assets often emerged from within the cryptocurrency system, giving exchanges a natural home-field advantage.

However, the decline of altcoins has effectively ended the era where exchanges acted as both referees and players. As the number of quality assets that can be continuously generated internally decreases, exchanges have to turn their attention externally, whether it be SpaceX, OpenAI, Anthropic, or stocks, prediction markets, and more real-world assets, all aimed at attracting user trading.

In addition to cryptocurrency exchanges, traditional brokerages are also moving towards trading everything. Robinhood has introduced cryptocurrency assets, prediction markets, and tokenized stocks beyond just stocks; Nasdaq and the NYSE plan to promote tokenized trading; and Moomoo, a subsidiary of Futu, has even directly integrated Hyperliquid's on-chain U.S. stock perpetual contract market, allowing traditional brokerage users to see on-chain derivative prices.

The underlying logic is actually the same; whether it is a cryptocurrency exchange or a traditional brokerage, they face the same problem: a single asset is increasingly difficult to bring sustained growth. When users have only one wallet and limited time, whoever can provide more assets has the opportunity to keep users on their platform. Thus, all platforms are beginning to step out of their home turf and enter each other's territory.

However, this major product update from Coinbase may also provide trading platforms with a new dimension of competition.

On one hand, in addition to expanding the distribution of more quality assets, it also involves how to further lower the user participation threshold and improve distribution efficiency, thereby capturing a larger share of users' wallets.

As mentioned earlier, algorithms have changed the way information is distributed; prediction markets themselves are also a typical case of repackaging complex options trading to make it more acceptable to ordinary users.

In the future, the integration of AI Agents and Crypto is expected to allow financial products to no longer just be passively "provided" to users but to be actively "designed" into forms that are easier to understand and consume, thus attracting more non-professional users into the market and gaining greater traffic.

On the other hand, competition may also lie in who can make as many financial consumption behaviors as possible occur on their platform; beyond investment trading, there are opportunities to extend to real-world payments, consumption, and a series of behaviors.

The Battle for the Super App Entry: What Are the Weapons of Cryptocurrency Exchanges?

If everyone is ultimately heading towards trading everything, then what exactly is the advantage of cryptocurrency exchanges?

In the past, this question was easy to answer. There were more wealth effects from cryptocurrency assets and opportunities in the on-chain ecosystem. But as altcoins recede, stock platforms begin to engage in cryptocurrency, and brokerages embrace tokenization and prediction markets, this advantage seems less convincing.

Take prediction markets as an example; Kalshi CEO Tarek Mansour stated that his real competitors are not Polymarket, but traditional financial platforms like CME and Robinhood. This actually indicates that, compared to products, distribution capability is more important.

From this perspective, cryptocurrency exchanges still have a few cards to play. First is globalization; compared to traditional brokerages that are limited by geography, cryptocurrency exchanges naturally have a broader international user base. Second is the 24/7 trading culture. The cryptocurrency market has operated around the clock since its inception, and users' acceptance of perpetual contracts, leverage, real-time quotes, and high-frequency trading is much higher than that of traditional financial users. Moving a step further, on-chain capabilities and the combinability of assets may also be a differentiated advantage.

However, whether these advantages are sufficient to support them in winning the next round of competition remains uncertain for now. But one thing is becoming increasingly clear: compared to challenging Binance, the stage for cryptocurrency exchanges is getting larger.