If you’ve ever tried to buy Bitcoin, you’ve probably used Coinbase. It’s one of the most popular cryptocurrency exchanges, and for good reason.
It’s easy to use, has a great user interface, and is one of the most trusted exchanges in the space.
But one thing that Coinbase is often criticized for is its long transaction times. Why does it take so long for Coinbase to send you your Bitcoin?
The answer has to do with Coinbase’s business model. Coinbase makes money by charging a small fee on each transaction.
That fee is usually around 1%.
In order to make money, Coinbase needs to keep a certain amount of Bitcoin in its reserves. That way, when you want to sell your Bitcoin, Coinbase can immediately buy it from you and then sell it to someone else.
Coinbase is a digital currency exchange that allows users to buy and sell cryptocurrency. However, it may sometimes hold your money longer than expected, which can be inconvenient and frustrating. Coinbase may hold your funds for security, compliance, or other reasons related to the transaction. Therefore, it is important to understand why Coinbase is holding your money before taking any action. Please be aware of the potential risks associated with Coinbase before using the platform.
This reserve system is similar to how a bank works. When you deposit money into a bank, the bank doesn’t just put that money into its vault and forget about it.
Instead, the bank loans that money out to other people, while still keeping some in reserve in case you want to withdraw your money.
The same is true for Coinbase. When you sell your Bitcoin on Coinbase, they need to keep some in reserve in case you want to buy more Bitcoin or withdraw your money.
That’s why it can take a few days for your transaction to go through – because Coinbase needs to make sure they have enough Bitcoin on hand to cover your withdrawal.
So if you’re wondering why Coinbase is holding your money, now you know!.