traders need liquidity. coinbase is arguably the most liquid spot exchange.

bitfinex is highly liquid too, but many people don't view them as a legitimate company and are paranoid about the safety of deposited funds. coinbase comes with money transmitter licenses, FDIC insurance and even crypto insurance on their hot wallets, a well known CEO, etc so people feel comfortable with them.

they also have stuff like "coinbase earn" which reels in small casual investors, they offer staking rewards and interest payments on USDC.....this stuff has appeal for some people. now they're offering low leverage loans too.

personally i hate coinbase, but i did KYC there several years ago and don't intend to do it anywhere else, so i still occasionally use them. because their trading fees are so high now, i usually trade BTC against stablecoins on altcoin exchanges like binance and kucoin, then i withdraw USDC to coinbase, which i can convert to USD and withdraw for free. that cuts down on all the fees.