Global Digital Asset Exchange, most often referred to as GDAX, is one of the world’s most popular places for the exchange of cryptocurrencies. GDAX is run by the same company that owns Coinbase, arguably the more popular cryptocurrency exchange platform of the two. While both provide the same functionality, many advanced investors inevitably make GDAX their primary form of crypto trading.
The GDAX platform is better suited for people with an intermediate understanding of crypto trading, institutional investors, and professional investors. GDAX may look slightly daunting for beginners, but it’s fairly easy to understand once you get the hang of it. Customer USD funds in GDAX are FDIC insured, meaning your balance up to $250,000 is protected. The exchange has a variety of digital currency pairs like Bitcoin, Ethereum, Litecoin, as well as fiat currencies such as USD and EUR.
GDAX and Coinbase are owned by the same parent company, and each exchange is geared towards different purposes.
Coinbase as we know it today is very easy to use, and this is largely why so many first-time Bitcoin buyers start out with Coinbase. Adam White, the Vice President of Coinbase, noted “We believe exchanges that provide advanced trading features and meet regulatory requirements are most likely to succeed long term.”
Chances are if it’s your first time buying a cryptocurrency, you want the process to be as simple as possible. Coinbase recognized the gap between mass user adoption and robust functionality, and decided to split into two different business models. Coinbase aims to on-board as many new traders as possible, and GDAX aims to provide more educated investors the functionality they need.
In White’s words, “Coinbase is designed for retail customers while GDAX is focused on serving sophisticated and professional traders.”
It’s important to note how the Coinbase team handled a flash-crash in June. Ethereum prices on GDAX took a nosedive from $317 to as low as 10 cents due to a multimillion-dollar market sell order. This gigantic sell order triggered an avalanche of around 800 automated stop-loss orders and margin-funding liquidations.
The fall caused quite the commotion among traders who woke up to chunks or all of their Ethereum gone due to the GDAX crash, but the Coinbase team handled it fairly well. Trading of ETH-USD was temporarily halted, but then restored after the Coinbase team ensured there weren’t any problems with the GDAX systems.
GDAX honored every single transaction using company funds and took responsibility for the flash crash. While the financial damage was mitigated, users still noted that the lack of accessibility to the platform during the crash was aggravating.