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The most experienced can attest to this: a COINBASE listing often gives rise to a feeling of euphoria, an unequaled adrenaline rush caused by the stratospheric pump of your beloved altcoin.
After contacting your closest friends and sharing your experience, you may have started a google search for "How do I start my own investment fund?" The difficulty of the task cools you, especially since you attend the dump pre listing which sees your portfolio melt by 30%. Know that this phenomenon now has a name, you have been a victim of: The Coinbase Effect.
Mixed results
In a study by Coinmetrics, the effect of a listing on the American reference platform was studied through 16 alternative cryptocurrencies: the results were moderate.
After taking into account the average price 10 days before and after listing, the research firm concludes that a price variation of -1% to + 14% takes place on the newly included altcoins. Only three assets have managed to overcome this trend: Tezos (XTZ), Chainlink (LINK) and OmiseGo (OMG) exceeding every 50% of capital gain.
6 of them even declined 10 days after the listing: CVC (-4%), EOS (-1%), GNT (-1%), MANA (-14%), REP (-7%), XLM (-1%).
The report therefore recommends being reactive if you want to keep your earnings, and not count on a constant increase in assets over the long term.
The state of the market: a key factor
The report states that the state of the market greatly influences the performance inherent in the listing. At the end of 2018, the impact of the integration of a new cryptocurrency on the Coinbase platform was even negative in the long term, during the bear market period.
In 2019, the market defined as “undecided” often led to random and mixed results. However, during the second half of the year, the average performance of the newly listed altcoins was positive and experienced a constant increase in value.
“Considering Coinbase as the platform of excellence for small investors, the impact of listing is often significant for the best projects. However, there is another predominant factor: the state of the market. ”
In conclusion, if you adopt a purely speculative profile, it is better to be agile and know how to take profits. The year 2020 presents itself under the best auspices for the altcoin market. It is the first time since the end of 2018 that the values ??of these, after listing, remain positive. Would the bull market be back?
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