Analyzing Coinbase Listing’s Effects on Crypto Prices

by elgato_claiente

I thought I’d do an overview of the recent historical price trends of projects being added to Coinbase in light of a (high market cap platform) opening for trading later today. This is by no means an exhaustive deep dive, and if you feel I’ve missed something important then feel free to add it as a comment.

Our gut feeling is that CB listing = auto pump right? This can certainly happen, but it’s not quite that simple:

The above image charts performance 30 days before and after CB listing for 18 coins in 2020. As you can see, only six actually pumped after being listed, and only 3 of those sustained the higher price. Some coins even went down immediately and most continued to trade sideways or slowly bled out. The peak is generally 2-3 days after listing.

So it’s bad news then?

Not exactly. The risk/reward ratio of buying coins as they list on CB is still pretty good. When they drop it’s generally not a disasterous loss and when the hype takes hold things can go stratospheric.

How do I know if my coin will be one of the high performers?

The general historic pattern has been that CB listing acts as an amplifier to short term trends. If the coin is pumping when it lists, the pump is magnified. If it’s trading sideways then the trend generally continues. There is another useful historical pattern, though:

Based on the above data, surprise listings spike harder. Listings that are announced in advance perform better over the week leading up to listing but do not pump as hard.

Yeah yeah sure, but what about ADA?

ADA is currently pumping hard. If it’s still moving up when CB trading opens then it’s possible that things get interesting really fast. Since the listing was announced in advance some of that potential is already priced in. It’s really going to depend on how many people are trying to make a quick 20%/how many are going to hold on for the imminent Goguen announcement, which could herald an even greater spike.

It’s worth noting that it’s far higher in position and market cap than anything charted above and has a lot more hype coming in the short term. I like ADA’s prospects, but I’m not here to make predictions, so DYOR.

A final thought: whatever happens, the big moves are still to come for crypto. Don’t forget to enjoy the sunshine and your life offline. Take both the wins and losses in your stride and be nice to everyone. Good luck to all ADA holders.