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As millions of new customers rush to cryptocurrencies following massive price increases this year, competition between bitcoin and cryptocurrency exchanges is heating up. The bitcoin price has dropped considerably after skyrocketing to nearly $65,000 per bitcoin in April, but companies like San Francisco-based Coinbase continue to profit handsomely from transaction fees.
Now, Jack Mallers, the CEO of Chicago-based bitcoin payments business Strike, has issued a warning that Coinbase is not “competing in the free market,” revealing that Strike will allow US consumers to purchase and sell bitcoin for nearly no costs.
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Bitcoin Billionaire Issues (MORE FROM FORBES) In the midst of extreme cryptocurrency price volatility, a stark warning about a “trillion-dollar” blunder has been issued. Billy Bambrough contributed to this article.

Since hitting highs of approximately $65,000 per bitcoin in April, the bitcoin price has plummeted,… [+] coinciding with the Nasdaq market debut of major crypto exchange Coinbase.
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“It’s unclear if Coinbase can compete on fees, even if they wanted to,” Mallers wrote in a blog post. Mallers rose to prominence in the bitcoin and cryptocurrency community after it was announced that Strike would be working with the El Salvador government to bring mass bitcoin payments to the country.
Mallers, who is also the CEO of Strike’s parent firm Zap Technologies, has warned that bitcoin buyers using Coinbase are paying to “help finance the rest of [Coinbase’s] operations” with other cryptocurrencies, and has questioned how the company can afford this “customer acquisition.”
“Well, it’s most likely because they overcharge customers for bitcoin. “Make no mistake, when you buy bitcoin on Coinbase, you’re supporting sh*tcoins,” Mallers wrote, referring to a comment from Coinbase chief financial officer Alesia Haas, who stated that the company is “not attempting to win on fees.””
Brian Armstrong, the company’s CEO, revealed plans this week to develop a marketplace for decentralized programs, a project that appears to be inspired by Apple’s App Store, and to speed up the rate at which it adds digital assets. In a blog post, Armstrong stated that the exchange will “bring more assets to Coinbase, faster.”
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The price of bitcoin has risen dramatically in the previous year, generating millions of dollars in transaction fees for bitcoin and cryptocurrency exchanges, with Coinbase being one of the largest winners.
Coinbase Strike, which processes deals using bitcoin’s experimental second-layer Lightning Network, has announced that bitcoin transactions will cost roughly 0.3 percent. Coinbase, on the other hand, takes nearly 4% of some deals. Strike’s service, which Mallers claims will not generate revenue for the company, also undercuts PayPal and its subsidiary Venmo, Square’s Cash App, and Swan Bitcoin, according to Mallers.
Coinbase, the largest cryptocurrency exchange in the United States, went public in April, issuing its shares directly on the Nasdaq. It has 56 million verified customers and $223 billion in assets. Coinbase announced in May that it made $1.8 billion in revenue in the first three months of the year, up from $191 million a year before, and profits increased to $771 million from $32 million, nearly entirely due to trading fees.
Mallers wrote, “We just took the pin out of the grenade and flung it into the crowd.” “Purchasing bitcoin will not be more expensive than acquiring it. Purchasing bitcoin will not help to fund sh*tcoin casinos.”/nRead More

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