GDAX: What It Was, Rebranding as Coinbase Pro

What Was GDAX?

GDAX is the former name of the cryptocurrency exchange run by Coinbase, a popular broker for bitcoin and other digital assets. Unlike the in-app purchases available through the Coinbase wallet, GDAX was aimed at professional traders, with tools to track price movements and set complex buy and sell orders.

The exchange was launched in 2015 under the name Coinbase Exchange and later rebranded to GDAX, standing for Global Digital Asset Exchange. In 2018, GDAX was again rebranded to Coinbase Pro but kept its original functionality. Although GDAX was launched with only a handful of major cryptocurrencies, Coinbase Pro now allows trading in hundreds of different virtual assets.

Understanding GDAX

In 2015, Coinbase, one of the leading bitcoin companies in the United States, began to consider ways to expand its offerings. While the Coinbase wallet offered a simple interface for buying bitcoin, it had much less functionality than more traditional exchanges. In addition, the company charged a wide bid/ask spread that made the Coinbase prices less favorable than market prices.

In order to appeal to both types of customers, the company set up two separate exchanges. Less experienced buyers could continue to buy bitcoin directly from Coinbase, with a user-friendly interface tailored for more "casual" users. There was also a new exchange for more active traders, with sophisticated features such as price charts and limit orders. Originally called Coinbase Exchange, this was later rebranded to GDAX.

In addition, GDAX also began offering new assets. Beginning in 2016, GDAX introduced new assets such as litecoin and ethereum that were not yet available on the older Coinbase wallet. The exchange was again rebranded to Coinbase Pro in 2018 but continued to offer the same functionality while serving as a testing ground for new assets before adding them to the Coinbase wallet. There are now hundreds of assets being traded on Coinbase Pro.

Advantages and Disadvantages of GDAX

While GDAX offered more advanced trading options than the Coinbase wallet, they came with high tradeoffs in ease of use. Many users prefer the simple interface of the Coinbase wallet, with only one price to buy and one price to sell.

On the other hand, Coinbase charges a widespread on wallet purchases, resulting in prices that are several percentage points worse than the open market. On the exchange, GDAX (now Coinbase Pro) operates on a maker-taker fee model, with the exchange charging up to half a percent from each buyer or seller. Assets can easily be moved from the wallet to the exchange, allowing traders to access much better prices on the exchange.

GDAX also provided Coinbase users with more advanced functionality, such as price charts, an open order book, and the ability to set market and limit orders. These functions made it possible for traders to predict trends through technical analysis, although they were likely to confuse less experienced buyers. In addition, the exchange is not available in certain jurisdictions.

Finally, GDAX also allowed trading in assets that were not yet available on the ordinary Coinbase wallet. Starting in 2018, Coinbase announced plans to integrate dozens or hundreds of digital assets. These were added to the exchange first, and many of them were later added to the wallet as well.

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin.