Buying Cryptocurrency in Bundles
Never really considered buying cryptocurrency in a “product bundle” like a Microsoft Office suite or Adobe Creative Cloud software purchase but apparently, this is the latest thing from Coinbase. The biggest digital asset trading platform in the world has probably been feeling the pinch of the current bear market and is looking to boost sales using tactics from a “marketing and sales 101” playbook.
The Coinbase Bundle is a selection of the five digital currencies available on Coinbase, that is purchased in proportion to their USD market capitalization. Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ethereum Classic are included in different ratios based on the market capitalization and price at the time of purchase. The allocation for each of the five coins is calculated based on the price of each currency multiplied by the supply of the currency in circulation at the time of the transaction. Exact allocation of each coin in a bundle will vary due to price and market fluctuations. Customers in the US, UK and EU can buy a bundle, and the minimum amount that can be purchased is $25, £25, or €25. After purchase, individual coins are stored in their respective individual wallets and cannot be sold as a “bundle”.
It seems that since some still find buying cryptocurrency a challenge, Coinbase is now offering what they feel is a solution to the problem. But is bundling buys of Bitcoin with other lesser, cheaper altcoins beneficial to the crypto-enthusiast? Let’s take a look at some pros and cons.
Pros for Coinbase
- Bundling less-wanted altcoins can boost sales
- Bundling can improve profit realization on sinking altcoins
- Bundling can help sell altcoins before the price drops more
- Bundled coins go into individual wallets when purchased
- Less likely buyer will move or sell the coins individually
- Can increase coins held in the custody of Coinbase
Cons for Buyer
- Buying cryptocurrency in a bundle is no easier than buying individually.
- Bundle buying results in owning altcoins currently dropping in value.
- Overall value in the near future may be significantly lower.
- No guarantee price for some altcoins will recover.
- No control over the ratio of the 5 coins being bought
- Private Keys to all 5 coins are held by Coinbase, not the buyer, unless moved
There are some that might claim this will help those new to buying cryptocurrency diversify their portfolios. In reality, it appears to be a tactic beneficial to Coinbase more so than the buyers. While there are “no extra fees” incurred when buying a Coinbase Bundle, users will pay the same surcharge as if they were buying the coins individually, which is 1.5% commission on the fiat value. Diversification is not necessarily a good thing when the only coin choices are Bitcoin, Litecoin, Ethereum, Ethereum Classic, and Bitcoin Cash. Buying only Bitcoin and Litecoin might be a better move given a technical analysis of current prices and trends.
The bundling of cryptocurrrency by Coinbase feels like a marketing move designed to get buyers to acquire less-desirable coins that may soon be worth far less. While Coinbase is the largest exchange and one of the easiest for newcomers to navigate, there is some question as to whether the platform puts customers first. Putting less-desirable crypto coins in a package with Bitcoin may generate more buys by those who should spend time educating themselves before buying in the first place.
In any case, should you opt for this new method of buying cryptocurrency, be sure to move your funds to a secure private wallet after purchase. Cryptocurrency should never be stored on an exchange because to do so means you do not hold your private keys – the exchange does.