As of today, COINBASE has officially been listed on the Nasdaq stock exchange. This represents a huge step forward as Coinbase is the largest crypto exchange in the US and achieving this listing shows the amazing amount of growth crypto has experienced over the past few years. In this post, I'll discuss the most important details about the Coinbase listing as well as sharing why I believe this will be a a net positive for the entire crypto ecosystem.
What Is Coinbase?
For those of you who aren't familiar with Coinbase, it is one of the largest crypto exchanges in the world and definitely the largest in the US. Not only is it one of the largest exchanges, but it is also the place where a lot of crypto users, myself included, got started in crypto thanks to their generous "Coinbase Earn" program which allows users to earn crypto simply for watching videos and answering questions about the coins.
Direct Listing Strategy
In and of itself, the Coinbase listing on NASDAQ is phenomenal news for cryptocurrency, but what I found even more interesting is the specific way in which the stock was listed. In contrast to other stocks which sometimes use an investment bank to underwrite the initial public offering, Coinbase decided to do something that's known as a direct listing.
Under this direct listing, Coinbase bypassed traditional investment banks and the underwriting process and offered its shares for sale without the need of traditional financial intermediaries. I have to give them credit as this is an incredible marketing strategy that shows how cryptocurrencies can both become a mainstream while also remaining true to the principles of avoiding existing financial institutions. Their marketing team gets an A+ on that one.
Potential Positives....and Negatives
So, what does this Coinbase listing mean for cryptocurrency? Of course, everyone has different opinions and I found this article very helpful for showing both be potentially positive aspects of this listing as well as the potentially negative aspects.
I believe this listing will be a huge benefit for cryptocurrency. On the one hand, people that are already interested in cryptocurrency will see this listing as a sign that cryptocurrency is moving more to the mainstream and becoming more legitimate which will renew their support for crypto.
On the flip side, people that may not already be interested in cryptocurrency may hear of this exchange listing and begin analyzing Coinbase simply as another business to invest in. They might not care about cryptocurrency at all, but if they see a business is doing exceptionally well they might invest in it simply as another business and then later learn about all the roles that cryptocurrency can play. Overall, I see this listing as bringing more awareness to cryptocurrency as well as further legitimizing cryptocurrency.
Although I believe the listing will be popular, I think the author does a great job of cleaning out a potential downside as well. If the launch doesn't generate as much excitement as people expect, there's the possibility that the price of crypto could decrease. Lack of excitement about the launch could be taken as a sign that the general public isn't ready for a cryptocurrency stock just yet, and crypto investors could see this as a sign that mass adoption isn't as near as we thought it was. In turn, this could lead to slight disappointment and a sell pressure on cryptocurrency. However, I think that would be more of a slight decrease, and I wouldn't expect this to damage the long-run potential of cryptocurrency in any way.
Binance and Tokenized Coinbase Stock
One other thing that I found incredibly interesting is that Binance announced its plan to list the tokenized version of Coinbase stock as a trading pair with BUSD. Although I'm a US resident and cannot use Binance, I think this shows the absolutely breathtaking speed that cryptocurrency is moving at. Not only do we have the largest cryptocurrency exchange in the US finally getting listed as a public company, we also will have the ability to buy tokenized shares of that company!
Summary
In summary, I do believe the Coinbase listing will be a huge net benefit for the entire cryptocurrency ecosystem. I believe it will legitimize cryptocurrency as well as spreading awareness of cryptocurrency and bringing more people into the cryptocurrency ecosystem. That being said, I realize there's a multitude of different opinions and I'd like to know what you all think. Does anyone think that this might be a negative for cryptocurrency or that this is an example of cryptocurrency selling out and joining Wall Street? I'd love to know what you have to think.
As always, thanks for reading and nothing is financial advice
References
https://www.marketwatch.com/story/coinbase-ipo-everything-you-need-to-know-about-the-watershed-moment-in-crypto-11618350086?mod=home-page
https://finance.yahoo.com/news/coinbase-ipo-does-mean-crypto-155544380.html?guccounter=1&guce_referrer=aHR0cHM6Ly9lbmdpbmUucHJlc2VhcmNoLm9yZy8&guce_referrer_sig=AQAAAFd9vVKtJ9N1JvDthkT7auIsbF-9NDWFfGmzv9T1NVOL_8UoIFEQeLT1RRtKCGu3Mb2fL674mt6sU5IX5uyuNdEMfURiju1eAKzZWIu2AA5lmc4waeMEIghUGcgsY78Z75QP2KurbG-X28mr5O_nW4ta94YqHOyXkHNAo_aUXYql
https://www.investopedia.com/investing/difference-between-ipo-and-direct-listing/
https://finance.yahoo.com/news/crypto-exchange-binance-list-coinbase-101927458.html
