Is the Coinbase Effect Dead? Crypto assets show minimal movement after listing

As a continuation of the good news for the crypto asset Stellar, Coinbase recently announced the listing of XLM on its platform. The markets responded positively to the news with a 4% gain against the dollar, but similar to the recent listing of XRP on the platform; investors were somewhat disappointed.

Is this another confirmation of Coinbase’s waning influence? Or were previous pumps the result of market manipulation?

To be fair, many altcoins followed similar moves …

Plus, the Coinbase listing pump appears to be basically dead. $ XLM initially rose 7% and is now around 5% above the announcement level. There is nothing in Kryptoland to write home about

– Rob “Crypto Bobby” Paone (@crypto_bobby) March 13, 2019

Coinbase is taking the right steps

2018 was an outstanding year for Coinbase. For example, rumors of an imminent IPO circulated when they announced a successful $ 300 million investment round – a valuation of the company of $ 8 billion. They said the money would be spent on expanding the fiat crypto infrastructure. But they quickly turned back proposals for a public offering by saying:

“We would always remain a crypto-first company.”

Coinbase Ventures, their investment division, also invested in several startups over the past year. This step brought Nomics, Securitize, Starkware and Abacus on board and expanded their portfolio to include data and API specialization. But perhaps most significant was her collaboration with tech company Circle to develop the USDC stablecoin. USDC has made great strides in a short period of time since then. Circle CEO Jeremy Allaire celebrated his triumphs late last year by signaling his ambition to overtake Tether. And with leading exchanges like Bitfinex, KuCoin, Binance, Poloniex, and Korbit listing the coin, 2019 is a big promise.

USDC hits $ 250 million in just a few months. Great end of 2018. How to become the best stablecoin in 2019! @centre_io @circlepay @coinbase https://t.co/VmKHTTA79N

– Jeremy Allaire (@jerallaire) December 31, 2018

Don’t forget private investors

Aside from doing business, retail investors can now make instant withdrawals to PayPal. With the introduction of Coinbase Earn, users will also be rewarded for learning about crypto. This step recognizes that lack of knowledge is a significant barrier to crypto adoption. Coinbase Earn addresses this through incentives for users. They say:

“The idea is that users can learn more about the usefulness of an asset and the underlying technology while trying out a little bit of the asset.”

At the same time, the expansion of their product range has expanded the product range to include BAT, BSV, CVC, DAI, DNT, ETC, GNT, LOOM, MANA, MKR, XLM, XRP, USDC, ZEC, ZIL, ZRX. With an ongoing review to add more. Coinbase has announced its plans to eventually integrate almost all assets that meet its security, compliance and vision criteria. This brings welcome news to users who were previously frustrated with the lack of choice. In a statement they said:

Over time, we intend to give our customers access to more than 90% of all compliant digital assets by market capitalization. “

In addition, Coinbase, which is already available in 33 countries, has introduced support for six new European jurisdictions. These are Andorra, Gibraltar, Guernsey, Iceland, Isle of Man and Lithuania. However, users in these countries do not currently have access to Pro features. However, this suggests serious intent to expand its global presence and become a more influential player.

Coinbase remains influential, but not on price

While the crypto landscape has changed dramatically since the start of the bear market, for example due to a sharply reduced market capitalization, Coinbase remains at the forefront of development from both an institutional and retail perspective. But as can be seen with the recent listing of XRP and XLM, this no longer results in a rising token price.

For one thing, many still cling to the simplistic idea of ​​a positive correlation between price and availability. However, there are currently several confounders that distort this relationship. For example, those who stay in a bear market tend to be knowledgeable and support the fundamentals of what crypto is trying to achieve. While in May 2017, when Coinbase listed Litecoin and triggered a 40 percent increase in the price of Bitcoin, not only were there fewer exchanges, but the average investor was just out to make quick money in a seemingly frenzied free-for-all. In short, the hit-and-run investors are gone. While unfortunate in terms of liquidity and volume, One Alpha’s Yaniv Feldman sees this as necessary for long-term prosperity:

“The boom and bankruptcy in December 2017 and January 2018 had a cleansing effect on the ecosystem, eliminating many of the speculators and leaving mostly real investors, operators and builders in the market. This was necessary to move forward and build a successful ecosystem. “

What is Coinbase bringing to the table?

During tough times, investors are wary of where to spend their money for fear of losing it entirely. In this case, those who can spend do so based on strong fundamentals and long term viability. This point is exacerbated in a bear market that has already seen some prestigious projects, like NEM and ETC, expose funding problems. In an interview, Igor Artamonov from ETCDEV shares this view:

“A few things happened at the same time. I am sure that if that had happened a year ago it wouldn’t be a problem at all, a year ago there was still a lot of money on the market. But there is a change in a bear market. “

With that in mind, investors know that being listed on Coinbase does nothing to add to the fundamental value of this project. And given the prevailing market conditions, no sustained price increase is to be expected in the short term. Instead of this, Katie Talati from Arca sees the benefits in the future:

The long-term value of a broad retail exposure that a Coinbase listing offers is something that can be felt over many years, not a quick switch over a two week period. “

Market manipulation

Somewhat more unsavory is that the industry is plagued by allegations of insider trading and market manipulation. A study by John Griffin of the University of Texas claims that much of Bitcoin’s epic price spike in late 2017 was due to manipulation. He examined millions of transactions on Bitfinex and found that Tether was used to buy Bitcoin at critical moments. This helped stabilize the price as the market headed for a decline. Griffin said:

“It created price support for Bitcoin and had enormous price effects during the period we examined. Our research would show that there are highly developed people out there who are using investor interests to their advantage. “

Coinbase is no stranger to complaints about tampering. Numerous lawsuits have been filed against the exchange, with the most recent case again focusing on employees who benefited from the recent XRP listing. Against this background, it is conceivable that earlier Coinbase listings were also exposed to massive manipulation by “advanced people”. And what we are seeing in the present, a diminishing Coinbase effect, is in fact how the markets react when the “experienced people” have left

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Do you want a healthy crypto market without manipulation?
Start by sharing this daily and tag @SEC_News and @FINRA @coinbase added LTC – Charlie Lee ex-employee
You added BCH – insider trading
You added 0x – 3 former employees
1/2 pic.twitter.com/jnmzw0JEid

– Idriss N. (@ IdrissN83) October 20, 2018

Diminishing Coinbase effect

Coinbase is performing an impressive operation and by all accounts it will continue to grow. However, investors should no longer expect prices to rise after being listed on their platform. Market conditions do not support this, be it because the golden era is over, or because high-level market manipulators are leaving, or even a combination of factors is at stake.

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