After the Elon Musk effect, the Coinbase effect? Yes according to Messari, who observes that the listing of a cryptocurrency on the exchange giant allows it to benefit from an increase in its value.
XRP has been recording a sharp increase in value over the past two weeks. According to the CTO of Ripple, this trend could be explained by a rumor. Which one? An upcoming return of the token on Coinbase.
However, it is difficult to measure. What would be less, however, is the effect on the value of a cryptocurrency after its listing on Coinbase. One could even speak of a true “Coinbase effect”.
This effect remained theoretical until now. But the crypto specialist Messari can now confirm its reality. The rise of Cardano’s token, ADA, is therefore not an isolated case. Other cryptos before it have taken advantage of this leverage.
Messari was able to measure this by comparing the effects on the price of a token during the 5 days following its listing on major exchanges, including Coinbase, Binance, FTX, OKEx, Kraken and Gemini. Conclusion: Coinbase stands out.
“Coinbase listings have the highest average return, at 91%, but they also have the widest distribution, ranging from -32% to 645%,” observes analyst Roberto Talamas in “The Crypto Exchange Pump Phenomenon. “
Several tokens listed in recent months on the U.S. exchange thus seem to benefit from the Coinbase boost. Among them: cardano, ankr (ANKR), curve DAO (CRV) and storj (STORJ). Our colleagues at CoinDesk also point out that Filecoin (FIL) has seen a sixfold increase in value since its appearance on Coinbase last December.
However, as with the Elon Musk effect, the Coinbase effect produces highly variable results. Messari observes “outliers” with “considerable returns after their listing announcement. “
“Among these outliers, District0x (a platform for creating decentralized marketplaces and communities) and Civic (an identity verification solution) saw their prices increase by 645% and 493%, respectively,” Talamas cites, for example.
So investors are well advised to keep an eye on Coinbase news and the addition of new cryptocurrencies. By buying before the listing begins (or even just after the announcement), they can hope to profit from a boom in the value.