Cryptocurrency company Coinbase went public on Wednesday on the Nasdaq exchange. Some view this as yet another signal that investors are hungry to get a piece of the hot market for digital currencies. Others point out that after a landmark $100 billion m-cap listing, Coinbase share slipped quite a lot, much like the volatile journey cryptos offer. Here is what Coinbase listing means for crypto investors.
Crypto gets acceptance
Coinbase’s listing on the Nasdaq stock exchange gives crypto investors a reason to believe that this is yet another step at formalization.
Coinbase shares are up for grabs for traditional investors who may be interested in digital currencies. Before Coinbase listing, these investors hardly had a way to legally bet on the cryptocurrency ecosystem. But, today they have Coinbase.
After all, Coinbase, a start-up founded in 2012, has made a solid business from allowing people to buy and sell around 90 different cryptocurrencies.
Coinbase is proof of what proponents of digital currencies have been saying all the way: cryptos will eventually redefine the way we handle money.
Feeding off each other
It is well-known that Bitcoin and other cryptocurrencies rose to record levels ahead of the direct offering of Coinbase. For instance, Bitcoin touched $64,000 apiece and now trades in the $61,000-62,000 range. Ether also touched highs of $2,280.
Beyond the obvious demand for cryptos, Coinbase going public is a watershed moment for cryptos as other crypto-related entities now can get listed too.
And, if cryptocurrencies see demand, the actual crypto investors are less likely to sell cryptos.
For Indian crypto ecosystem, the Coinbase listing will help get valuable attention from the government, central bank, and other agencies. A better-regulated crypto market within India can go a long way. If Coinbase is accepted as a legitimate business by US SEC, the Indian government and domestic regulators too are expected to warm up to cryptos.
Cryptocurrency operates through the blockchain i.e. via a decentralised, digital system. Blockchain offers multiple solutions that are likely to disrupt diverse markets in the years to come and has been considered as a foundational feature of cryptocurrency. Latest news updates state that Finance Minister Nirmala Sitharaman has made it clear that there will not be a complete ban on cryptocurrencies or at least the technology part of it.
Caution warranted
While Coinbase has more users and more revenues than many of the largest Wall Street players, it is important for crypto investors to realize that valuing this as a normal business may be wrong. Also, this is not a signal to hoard digital currencies.
For crypto investors, any new development for the crypto market may not always be a sign to buy more. Some caution is warranted. In fact, Coinbase listing can well turn out to be a new top for the market.
The euphoria surrounding bitcoin and cryptos requires proper fundamental research before loading up your crypto investments.
