Providing objective measurements of cryptocurrency usage based on the aggregated and anonymized activity of millions of Coinbase customers is the goal of the service, which is the first of its kind in crypto, according to the operator.
Trading signals are an addition to the typical market data Coinbase already provides and go beyond price, like the example illustrates:
Trading signal: Top holder activity
What it is: The top holder activity signal is the percentage of Coinbase customers with large balances of an asset (top 10%) who have not increased (bought) or decreased (sold) their positions in that asset through trading over the last 24 hours. This is updated approximately every 2 hours.
“While we can’t predict what crypto prices will do, we can tell you how the largest holders have recently traded with the top holder activity signal”, the announcement said, adding other signals such as typical hold time – the median number of days an asset stays in a Coinbase customer’s account or vault before it’s sold or sent to another address or wallet – and popularity.
Price correlation is yet another trading signal offered by Coinbase which measures how cryptocurrency prices have moved in relation to each other. This can help investors assess the historical diversity of their portfolio and assess potential risk exposure.
“For example, if you want to increase your exposure to potential BTC-related price movements, you could buy cryptocurrencies that are highly correlated to BTC. And if you wanted to hedge your bets against BTC-related price movements, you could buy crypto with a high negative correlation. Further, you could make uncorrelated bets with a crypto that has no relationship with BTC. Keep in mind that regardless of the data, price correlations are historical and not predictive of future correlations”, said the press release.
In April, Coinbase made the headlines for launching its own Visa debit card in the UK
, which allows people to spend their crypto balances direct from their cryptocurrency exchange account instead of pre-loading a specified amount of crypto onto their card.