After Coinbase is listed, can the “traditional” centralized cryptocurrency exchange usher in a new wave of leapfrog development?
Since the birth of Bitcoin, as the most important part of the cryptocurrency ecosystem, the role of cryptocurrency exchanges in the market is self-evident. Coinbase is currently the largest compliant cryptocurrency exchange in the United States. According to previous disclosure documents of the United States Securities and Exchange Commission (SEC), the exchange’s total revenue in 2020 reached 1.3 billion U.S. dollars, more than double the revenue in 2019. In terms of market value, as of December 31, 2020, Coinbase has 21,035,491 issued common shares of Class A and 164,950,620 issued common shares of Class B, plus 114,850,769 Class A common shares to be publicly issued, for a total of 300,836,880 shares. If calculated according to the weighted trading price of Class A shares in the first quarter of $343.58 for private transactions, the market value of Coinbase on the privately traded market has exceeded 100 billion U.S. dollars, so its listing is of extraordinary significance to the entire industry, not only for the entire industry The cryptocurrency exchange market has injected a “bolster”, which can even be said to be a milestone and a new starting point in the development of the entire cryptocurrency industry.
Coinbase listing is positive, boosting the soaring of CEX platform currency
Prior to the listing of Coinbase, the major blockchain concept stocks in the U.S. stocks all came from mining companies, but these companies are still unable to match Coinbase in terms of financial performance. Judging from last year’s financial data, even those leading mining machine companies did not perform as well as Coinbase. Not only that, Bitcoin has repeatedly broken through the $60,000 resistance level this year, and has been able to basically maintain it in the range of $58-60,000. From a trend point of view, the duration of this bull market is relatively longer. If Coinbase can take advantage of the trend However, it is expected that it will be able to capture better market reactions, and it may even become a weather vane for the capital market to “test” the crypto market.
If nothing else, the market value of Coinbase should rise after the listing, which will further promote the bull market. Naturally, people will think of several mainstream cryptocurrency exchanges that are benchmarked against Coinbase, such as Binance, OKEx, and OKEx. Huobi, etc., but according to previous related news, these mainstream cryptocurrency exchanges have no plans to go public at this stage.
However, the crypto market has always been a market full of changes, and sometimes “said you don’t want to be physically honest”, so don’t be surprised if any cryptocurrency exchanges follow Coinbase to choose to list in the future. Unlike Coinbase, the top cryptocurrency exchanges have basically issued their own platform coins, and most of the platform coins are in the hands of the exchanges. They can use the platform coins as cash flow for investment to increase operations. In terms of flexibility, at the same time, the value-added part of the platform currency can be calculated as profit to improve the profitability of the exchange. In this case, once the “listing effect” is fermented, this favorable trend will undoubtedly be passed on to the platform currency and form an immeasurable positive impact, which will further promote the increase in the value of the entire platform currency market.
In fact, the listing of Coinbase is estimated to be one of the largest new listed companies in the technology industry in 2021, and it will also have a huge positive impact on cryptocurrency market investors and blockchain technology champions. Since the news came out, it has been a major benefit for the entire cryptocurrency exchange industry, especially the centralized cryptocurrency exchange (CEX). After all, the direct listing of a leading cryptocurrency exchange will bring benchmarking effect.
On the other hand, the “traditional” centralized cryptocurrency exchange is not inferior to Coinbase. From the perspective of trading volume, the 24-hour trading volume of exchanges such as Binance and Huobi has exceeded Coinbase.
From the perspective of profitability, Binance’s 2020 profit is between 800 million and 1 billion U.S. dollars; Huobi’s revenue in 2019 is approximately 680 million U.S. dollars. Generally speaking, these cryptocurrency transactions are under the same comprehensive strength. All of them are likely to usher in a wave of leaping development with the help of Coinbase, the shareholder wind. The most direct effect that can be seen at present is to benefit the platform currency, because from the market value of the platform currency, there is still a certain distance from the market value of Coinbase, but there is a gap and a gap. It is not a “bad thing”, which means that even if the platform currency is currently rising fiercely, there is still a lot of room for growth.
Below, let us take a look at the recent performance of the top cryptocurrency exchange platform currency. Among the top cryptocurrency exchange platform coins, the 14-day increase is the highest in KuCoin’s KCS, followed by BNB, OKB and HT.
Is listing the only direction for the development of “traditional” centralized crypto exchanges?
Obviously not, especially in the field of cryptocurrency. The idea of ”Satoshi Nakamoto” is to build a global ledger that records the truth and subvert the monopoly of centralized institutions. From this perspective, the listing seems to be somewhat contradictory to the original intention of cryptocurrency. But at least for now, listing is not the only direction for the development of “traditional” centralized cryptocurrency exchanges. (Interestingly, Coinbase also mentioned the address of Satoshi Nakamoto in the prospectus form. According to the exchange’s CEO Brian Armstrong, he did so only in the hope of showing respect to the founders of the crypto economy at the time of listing, as the first company The listing of cryptocurrency exchanges also hopes to express recognition of “Satoshi Nakamoto”.)
Listing is indeed a way to raise funds quickly, but it exists more in the traditional field. Compared with the cryptocurrency exchanges that can issue platform coins, the financing model is more diversified. Although Coinbase is “the first to eat Crabs”, but from the perspective of the entire cryptocurrency industry, at least at this stage, there will not be too many exchanges following up.
to sum up
It is undeniable that the advantages of successful listing of cryptocurrency exchanges outweigh the disadvantages. At least it shows that this type of “exchange” for trading digital assets has been recognized by the mainstream financial market, and it has further increased the trust of users and the industry, and then attracted more people. Explore the cryptocurrency market and finally realize the mainstreaming of cryptocurrency. On the other hand, since the listing of U.S. stocks must be approved by the U.S. Securities and Exchange Commission, this means that the door has been opened to cryptocurrency exchanges from a regulatory level. If Coinbase performs well after its listing, will more exchanges follow suit? The broad road is worthy of attention.
For leading cryptocurrency exchanges such as Binance, it is unlikely that they will be listed on Coinbase in the short term, but it does not mean that they will not choose to list in the future. Of course, even if these leading cryptocurrency exchanges will not be listed in the near future, they can also use the “dongfeng” listed on Coinbase to promote their own business development.
After Coinbase is listed, can the “traditional” centralized cryptocurrency exchange usher in a new wave of leapfrog development? Let us wait and see.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.