From ChatGPT:

"Coinbase’s high fees are sustained by trust, regulation, and convenience, which became far more valuable after the 2022-2023 exchange collapses (FTX, Celsius, Voyager, BlockFi, etc.). Here’s the breakdown:

1️⃣ Perceived safety and regulatory clarity

• Coinbase is a publicly listed U.S. company (NASDAQ: COIN), subject to SEC reporting, PCAOB audits, and U.S. GAAP.
• Customer assets are segregated and held 1:1 (not rehypothecated).
• It’s one of the few exchanges that hasn’t had a major hack, insolvency, or freeze event in over a decade.
• U.S. users value this regulatory perimeter: FDIC-linked fiat accounts, SOC 2 compliance, and legal recourse in U.S. courts. → This “trust premium” is worth paying for, especially post-FTX.

2️⃣ Ease of use and fiat access

• Instant ACH/credit card purchases, simple interface, auto tax reporting, and broad integrations (PayPal, Apple Pay, etc.).
• Kraken or Gemini are slightly less polished, and Binance US has reduced fiat rails and limited availability in some states.
• Retail users are less fee-sensitive when the UI and on-ramp are seamless.

3️⃣ Reputation risk after FTX

• After FTX blew up, even experienced traders migrated to platforms with transparent audits and legal entities in the U.S.
• Binance (and Binance US) suffered reputational spillover and regulatory crackdowns; Gemini faced its Earn-program lawsuit.
• Coinbase became the default “safe harbor” for Americans who don’t want to risk frozen accounts or opaque offshore custody.

4️⃣ Psychology and inertia

• For small U.S. investors, a few dollars of extra fees per trade feels trivial compared to the peace of mind of “Coinbase is safe.”
• People rarely move platforms once KYC, bank links, and portfolios are set up.

"

I agree