Crypto-industry giants Coinbase announced earlier today that they have done away with their unpopular policy of making buyers wait to receive their cryptocurrencies. In a blog post this afternoon, director of communications David Farmer explained that many customers in the US funding purchases directly from their bank accounts would now receive coins instantly. He wrote:
We are excited to announce the ability for customers to instantly purchase digital currency using a U.S. bank account. Previously, customers who purchased using a bank account had to wait several days before receiving their digital currency. Customers can now buy up to $25,000 and receive access to their digital currency immediately.
The waiting period that Farmer describes was due to lack of assurances that customers indeed had the funds they said they did in their accounts. Zach Abrams, Head of Product at the San Francisco exchange describes how the company have been working towards allowing instant purchases for some time:
Coinbase uses proprietary fraud prevention systems it has developed over the last 5 years, to determine how this instant purchase feature is rolled out to groups of customers and that the customers with access to this feature have sufficient balance in their bank account with good purchase history.
Whilst the company did previously offer a real-time trading option in GDAX, many customers found the professional and complex platform daunting, and as such casual traders are put off from using it. What’s more, although crypto purchases on GDAX are instant, the account still must be pre-funded, and this too can take days.
Today’s announcement to extend instant purchasing to users of the standard Coinbase service will likely excite those wishing to trade casually. It should also help alleviate the frustration of having funds locked up in an asset with which customers can do nothing with for several days. It was an oft-repeated complaint of Coinbase customers who had purchased cryptocurrency only to see the value crash soon after leaving them no option but to hold, even if they wanted to sell it on quickly before a small loss became a big one.
The decision is likely to impact those cryptocurrencies which users of Coinbase can purchase using the platform. These are Bitcoin, Ethereum, and Litecoin. It’s likely that the move will result in even greater liquidity in the market, and this in turn will send prices even higher. We’ve already potentially seen some evidence of this in action. The price of Litecoin experienced 12% gains earlier today at around the time of the announcement.