Coinbase, the well-known US cryptocurrency on-ramp, has established itself as one of the most respected entry points and custodians in the space. It initially listed only Bitcoin when it launched, during which time it has added only another five coins, representing less than a quarter of one percent of the coins listed on CoinMarketCap.
Mere rumors of a Coinbase listing have been enough to pump the price of a coin, and a confirmed listing always makes headlines, but what is the actual effect of a Coinbase listing on the price of a coin? Has the ‘Coinbase effect’ changed over the years? We look at the other coins added to Coinbase besides Bitcoin and assess what has happened to them.
Ethereum was listed on Coinbase in one form when it was added to its newly-rebranded GDAX exchange in May 2016. The rumors of this listing alone caused the price to rise from $10 to $14, with the official announcement causing it to peak at $14.90, a 49% increase. On July 21, a day after the Ethereum hard fork, Coinbase announced that Ethereum had been added to its main platform, leading to a rise from $12.15 to £14.88 (22%), and putting Ethereum center stage alongside Bitcoin.
One of the first mentions of Litecoin being added to Coinbase came from a tweet from founder Charlie Lee on the day Ethereum was added to GDAX. This rumor did nothing for the price, only creeping up from $3.90 to $4.20 over the following week (7.7%). On August 24, 2016 Coinbase added Litecoin to GDAX, which resulted in a similarly unimpressive move from $3.61 to $3.99 (10.5%), and Litecoin was finally added to Coinbase’s main platform May 3, 2017. This resulted in a much healthier move from $16 to $30 (87%), which presumably came as a relief to holders who had witnessed the prior price action.
Bitcoin Cash was sitting at the $1800 mark on December 17, 2017 when the price mysteriously began to shoot upwards. At midnight December 20, Coinbase announced its support of Bitcoin Cash, by which point the coin had gone up by $1000 (55%). The listing news sent it stratospheric, touching $3,815 within two hours of the news (111%) before shooting up again to $4,355 the same day, marking a 142% increase in a little over 48 hours. Rumors of insider trading sprang up, although Coinbase eventually identified no internal wrongdoing.
Coinbase announced its decision to list Ethereum’s older brother out of the blue on June 12, 2018, though did not specify a launch date. This announcement caused the price to rise from $12.88 to a peak of $16.15 just hours later (25%), but regular progress reports from Coinbase made for some price fluctuations over the following weeks. Coinbase announced the listing on August 7, at which point the price, which had been steadily rising in anticipation of the news, dropped from $20 to $11 (-45%), leading to some very disappointed investors.
0x had long been a favorite to be added to Coinbase, with rumors abounding throughout most of 2018. The strongest hint came October 7 when a ZRX wallet was spotted in the Coinbase tax calculator, before confirmation finally came on October 11, 2018, boosting the price from $0.68 to $0.87 (28%). Trading officially began October 16 and brought with it an increase from $0.74 to $1.07 (44%), in keeping with general tradition.
Coinbase Still Has the Magic
As we can see, a Coinbase addition more often than not results in positive price action, and time doesn’t seem to have dimmed its effects. There are a however number of factors that have to be taken into consideration when it comes to potential impact, such as the market situation at the time, if any leaks or reveals have got out, and what the price action has been like leading into the news. Nevertheless, we can see that a Coinbase listing has and still does raise a coin’s value, which will ensure that holders of frequently associated coins continue to hope for an announcement that their coin is next.