Coinbase Effect: Is Crypto Ready For The Incoming Herd?

Coinbase Effect: Is Crypto Ready For The Incoming Herd?

If the pro-Bitcoin actions of titans Goldman Sachs and JP Morgan have been insufficient, the traditional market seems to have given cryptocurrencies its blessing yesterday, with the debut of Coinbase on Nasdaq.

The exchange is estimated to have had one of the most successful public direct listings in history. Data from Nasdaq indicates that

$COIN with $29b in volume on Day One, which I’m pretty sure is an all-time record. $BABA was $25b and $FB was $23b.

— Eric Balchunas (@EricBalchunas) April 14, 2021

Chief Strategy Officer at CoinShares, Meltem Demiros, was just one of the many in the crypto space celebrating the debut. Surpassing her time estimations, Coinbase is now worth more than Goldman Sachs, one the largest U.S. banks, with a total market cap of about $90 billion, at the time of writing.

Demiros’ sentiment was shared by most of the crypto industry. From early Coinbase investors like Garry Tan, his initial $300,000 investment in 2013 made a 6000x profit, to Paradigm’s Omar Bohsali, legendary rap singer Nasir Jones and others.

Grayscale CEO Michael Sonnenshein said Coinbase’s debut has signaled a new level of maturity for the crypto industry.

There’s really this nice recursive effect where this industry isn’t just about the assets. It’s now really about the companies, which we’ve been investing in for almost a decade now (…).

CoinShares CSO later referred to the exchange “blockbuster” numbers in its Q1, 2021, earnings report, and the pressure to stay at the top of the innovation race. Demiros said:

To get even within the crypto industry, the pass of innovation has just been insane to see and what we are looking at, are (Coinbase’s Q1 revenues) numbers sustainable? Can Coinbase diversify quickly enough? For this week, for this moment, I certainly think there is still a lot of enthusiasm.

Coinbase’s debut will attract further institutional investors to the market. The crypto industry is, said Demiros, speaking the language of the bank’s “Billies” (Billions USD).

At the time of writing, Bitcoin (BTC) is trading at $62.495 moving sideways in the past day (0.1%). In the weekly chart, BTC still has an 11.4% profit.

Coinbase COIN Bitcoin BTC
BTC with sideways movement in the 24-hour chart. Source: BTCUSD Tradingview

On Coinbase public listing, CEO Brian Armstrong said:

The cryptoeconomy today is nothing like the ecosystem that existed when we launched Coinbase 9 years ago. And it’s nothing like the ecosystem that will exist 9 years from now (…). As the first major crypto company to publicly list, today is a big day for Coinbase and the cryptoeconomy that we’re a part of.

editorial staff