Messari, a Crypto analytics provider, has confirmed through a report that it compiled that Coinbase listings do outperform its rival listings even though a bit inconsistently. New token listings have been recently launched on Coinbase, and within the five days that these listings were launched, the listings gained up to 91% on average. In a report compiled by Messari, the famous fable that there is a thing such as the “Coinbase effect” might be very true. The Coinbase effect says that new token listings launched on Coinbase rather than other cryptocurrency exchanges tend to outperform other listings. The listings on Coinbase outperform the listings on exchanges like Binance, FTX, Gemini, etc. Yes, the Coinbase effect is valid on average or generally, but the effect is not consistent on all listings launched on Coinbase. Also, from the report that Messari did, the effect is not as great as popularly assumed.
The Messari Report
Messari analyzed up to 28 new Coinbase listings that were recently launched five days prior and compared these Coinbase listings against listings from other exchanges. The Coinbase listings were compared against 22 Binance listings, 19 Kraken listings, 14 OKEx listings, 19 FTX listings, and 19 Gemini listings. These listings from the other exchanges were also monitored over five days. The report showed that the listings from Coinbase had the highest return on average at 91%. On “average” is critical here because this was not consistent.
The 28 listings on Coinbase ranged from having a 32% loss to a whopping 645% gain over those five days. While the other exchanges generally had about 25% loss and 60% gain for their listings. Reasons for the Coinbase Outperformance. However, the Messari experts and researchers did note that several external factors were responsible for the extreme returns for the tokens that were listed on Coinbase. For example, Distict0x had an increase in return of up to 645% after it was listed. Also, another example, Civic gained up to 493% after it was listed on Coinbase.
OKEx and others exchanges record success
While not all listings on Coinbase had notable returns, the adjusted data showed that OKEx gained almost 20%, Kraken gained 15%, FTX gained 12%, and Binance gained roughly 0%. Gemini, one of the listings on Coinbase, had a slight loss. Experts speculate that the Coinbase effect might have to do with the firm brand name that Coinbase has and the extreme popularity the exchange has garnered. They also speculate that the Coinbase effect could also result from the regulations that the U.S government placed on the cryptocurrency trading sector.
These regulations have seriously hindered the ability of many exchanges to have access to the U.S market. These regulations then led to a massive clampdown on the reach of retail investors to many altcoins. Messari also stated that the strong success of new listings on Coinbase could also be due to retail investors from the U.S.A having to compete and race to gain access to markets that were previously not accessible.