Customers are now allowed to buy and sell bitcoin at a specified price. The new option will help to limit investors’ losses and secure the profits during volatile periods in the bitcoin economy.

More specifically, Coinbase stop orders allow customers to determine the amount of bitcoin they would like to buy when bitcoin price rises to or above a particular point. Selling a predetermined amount of bitcoins once the price falls to or below a certain indicated level is the second option. Once created, the stop order will be memorised by the system and automatically executed when the chosen “stop price” is reached.

As the official Coinbase Community Forum reads, stop contracts have been the most popular request from customers since the very launch of Coinbase Exchange.

Bitcoin is considered to be a risky asset since one of its key characteristics is price volatility, which became particularly sensitive in 2015. In this light, stop orders seem to be a means to level risks since they respond to bitcoin price movements and protect assets during periods of volatility. Thus, the introduction of stop orders can be aimed at attracting more customers to Coinbase as well at securing against the further instability of bitcoin price in the light of the ongoing block size debate.

However, Coinbase is not the first bitcoin exchange to make stop orders available. Bitstamp, another large cryptocurrency market, introduced a similar service in September 2014.

Coinbase is an active participant of bitcoin advancement and of the debate over the future of the cryptocurrency. After the hard fork timeline agreement of 21 February, which led to a split in bitcoin community, Coinbase adopted Bitcoin Classic protocol. Answering to critics, Coinbase CEO, Brian Armstrong proposed to bet $5,000 that bitcoin’s first hard fork will succeed.

Anna Lavinskaya