Coinbase Shares Fall as Bitcoin Spot Trading Tanks, Biden Asks Congress to Waive Gas Tax

Coinbase's shares are falling as Binance waives some transaction fees in a bid to entice new investors. Meanwhile, President Biden has a plan to lower gas prices--but how much can he really do?

The stock market is lower Wednesday after an impressive rally on Tuesday to start the holiday-shortened trading week. However, the biggest news in the financial world today is with Coinbase, a cryptocurrency trading platform that is seeing its stock price drop amid a historic meltdown of crypto values. Some economists are now calling crypto a bubble that’s set to pop due to fundamental issues that underpin the entire enterprise.

Bitcoin Back

Another issue is also pressuring Coinbase. Rival trading platform Binance recently announced it will be waiving some trading fees for users. This struck many investors as unusual, as crypto exchange platforms make the majority of their money from transaction fees. Trading volumes have declined sharply throughout 2022, and the price of major crypto standards like Bitcoin and Ether are flirting with recent lows. 

Read More: Check out the latest Mind Your Dollars stock and financial news.

Elsewhere, President Joe Biden is taking public action to attempt to curtail sky-high gas prices in the US. Some contingent of the public actively believes the president’s decision-making process has more impact on gas prices than the economics of supply and demand, which has pushed Biden to make numerous public statements calling on oil companies to reduce their prices. Now the president is calling on Congress to waive the gas tax to offer some relief for American workers at the pump.

Crypto Meltdown Concerns Investors


Cryptocurrencies are undergoing a massive meltdown right now as investors sell out of the risky, untested asset. Many analysts have likened crypto to similar speculative bubbles, like the “Dot Com” bubble of the late 90s or the Tulip Mania bubble of the Dutch Golden Age. In the short term, crypto has suffered from the same issues that traditional financial markets understood hundreds of years ago. Too many investors used too much leverage to apply short-term loans to long-term investments. This is like building a house on sand, and it’s not surprising to see this approach backfiring.

However, something even more crucial could be happening behind the scenes in the crypto industry. Because Bitcoin is clunky to use for actual transactions, it’s relegated to a role as something more speculative. The value of Bitcoin is the value that investors ascribe to it, as it has no intrinsic use case for the vast majority of holders. Moreover, even if more people wanted to use Bitcoin as a means of exchange, the system becomes costlier to maintain the more people use it.

“In a way congestion is a feature, not a bug,” explains the Bank for International Settlements’ economic advisor Hyun Song Shin. Shin notes that for government-backed currencies “network effects mean the more the merrier, but crypto achieves exactly the opposite, the more the sorrier.” Without a real-world application, cryptocurrency finds itself at the whims of an unregulated market.

Binance Waives Some Fees

Cryptocurrency Featured

Binance has waived some spot transaction fees in an attempt to lure some investors back into the crypto market. The move will likely help trade volumes spike in the short term, but it raises some questions about the long-term viability of the company’s strategy. If the only way to get people to trade crypto is for the platforms involved to do so for free, then the industry might be in a worse position than originally thought. 

Coinbase’s shares are now down 3% since Binance announced its move. The company is now looking to diversify its revenue streams. One plan the platform has introduced is a monthly subscription service, called Coinbase One, that allows users to engage in fee-free trading up to a $10,000 monthly cap.  

The new fee-free model is based on Robinhood’s system for stock trading. The Robinhood app doesn’t charge users anything to invest, but it uses a payment-for-order-flow model that gives its clearing house advanced knowledge of coming trades. This allows larger investors to get out ahead of changes and makes Robinhood passive income while it allows users with fewer funds to engage with the market. 

Biden Wants Congress to Waive Gas Tax

Joe Biden

US President Joe Biden has asked Congress to waive the national gas tax as an emergency measure to lighten the cost at the pump for the average American. Biden’s newly-proposed plan would pause the gas tax for three months. A senior administration official told reporters that removing the gas tax alone “isn’t going to solve the whole problem, it is something that can be done to take a real step to relieve some of that pain at the pump.”

The average gas price in the US has jumped recently because oil refining capacity is down across the globe. This has coincided with Russia’s invasion of Ukraine, which has further constrained the global supply, even as the summer season has resulted in yet higher demand for a suppressed supply of gas. 

Now, with gas prices hovering around $5 per gallon in the US, the average American is feeling the drag on their paycheck when they gas up. Some analysts now fear that this pattern could spill over into a recession before the end of the year.

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