This article comes fromDecrypt, original author: Scott Chipolina

Odaily Translator |

This article comes from

, original author: Scott Chipolina

Odaily Translator |

If you want to buy bitcoin, ethereum, litecoin or other cryptocurrencies, you must not go around a cryptocurrency exchange. As one of the most popular cryptocurrency trading platforms, Coinbase is about to conduct its first trading on April 14, 2021. Public offerings (IPOs).

For investors, Coinbase’s direct listing on Nasdaq is highly anticipated this time. Is this “encryption stock” worth investing in? How much actual expected income can be obtained after listing? These issues appear to be on the table. More importantly, what impact will the Coinbase listing have on the king of cryptocurrencies, Bitcoin?

For the cryptocurrency industry, this is an important milestone on the road to "mainstream recognition", and as the first company to focus on the cryptocurrency business, many people are eager to understand and weigh what it means for the future of Bitcoin. In general, the vast majority of people think that Coinbase trading in the open market is a good thing for Bitcoin and a blow to cryptocurrency skeptics.Daniel Ives, managing director of Wedbush Securities, said:

"The listing of Coinbase is a watershed moment for the cryptocurrency industry, which means that cryptocurrency is moving towards a more mainstream market. Coinbase is a typical representative of the encryption ecosystem and has now been closely watched by Wall Street."

However, listing is actually a double-edged sword.

If it turns out that Coinbase's listing did not achieve the expected results, or even ultimately failed, other cryptocurrency companies considering listing may have to shelve their listing plans, including Coinbase's competitor, cryptocurrency exchange Kraken (reportedly planning to A direct listing in 2022), as well as Bitcoin custodian and derivatives exchange Bakkt, which plans to "backdoor" a listing through a special purpose acquisition company (SPAC).

"Given that Bitcoin is still in its nascent and turbulent stage, we believe that in the next 12 to 18 months, about 5% of listed companies may choose to invest in Bitcoin." But at the same time, Daniel Ives also said that as more and more This figure could “significantly increase” as multiple regulations permeate the cryptocurrency space.

In fact, from the end of 2020, institutional Bitcoin demand increased significantly. Traditional companies such as MicroStrategy, Square, Grayscale, SkyBridge Capital and others have all been buying Bitcoin in a big way. Antoni Trenchev, co-founder and managing partner of cryptocurrency lender Nexo, said:

"Some things that have happened recently have undoubtedly had an impact on the Bitcoin market. In fact, since the Bitcoin block reward was halved, institutions such as MicroStrategy, Square, and PayPal have begun to actively invest in the Bitcoin market. This may be the reason why the market continues to rise. reason."

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The Positive Side of the Double-Edged Sword: Coinbase Listing Is Good for Bitcoin

For one of the world's largest bitcoin mining companies, Bitfarms CEO Emiliano Grodzki believes that the listing of Coinbase marks that the cryptocurrency industry has truly entered the mainstream.

Emiliano Grodzki admitted that cryptocurrencies were still a “novel” industry when Bitfarms first launched three years ago, explaining:

“Everyone has to be engrossed in the cryptocurrency business, but now that cryptocurrencies are no longer a novelty, the Coinbase direct listing is just the latest example of an explosion in legitimacy and trust, whether institutional or retail. Investors, basically the entire crypto space thinks so."

According to Ingo Fiedler, co-founder of Blockchain Research Lab, the Coinbase listing could help traditional investors gain exposure to bitcoin without exposing them to the often chaotic world of cryptocurrencies. Ingo Fiedler says:

“For those unwilling to hold Bitcoin directly, Coinbase stock will provide investors with a new kind of safe-haven exposure to Bitcoin.”

* On Feb. 25, the day Coinbase filed its S-1 listing with the U.S. Securities and Exchange Commission (SEC), which showed the exchange made $322 million in profits in 2020, bitcoin prices also fell, It fell from $49,849 to $46,993 that day (although the price of Bitcoin later bounced back to $51,000 following news of the Coinbase S-1).

* On April 6, when Coinbase announced record profits for the first quarter of 2021 (approximately between $730 million and $800 million), bitcoin prices actually moved in the opposite direction, opening the day at $58,707 , closing at $58,062.

Of course, although it seems that the effect of Coinbase’s listing is not directly reflected in the price of Bitcoin, the price of Bitcoin did hit a record high on the eve of Coinbase’s listing (on the evening of April 13th, Beijing time, Bitcoin broke through $62,000 to set a new price record), and at the same time Many bitcoiners have hinted that the upcoming public listing on Coinbase has played a crucial role in pushing the cryptocurrency once again into uncharted territory.

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The Backside of the Double-Edged Sword: Coinbase IPO Has Little Impact on Bitcoin

Although many cryptocurrency believers are optimistic about the listing of Coinbase, there are still some disagreements in the market. Some skeptics believe that Coinbase's choice of direct listing will not have much impact on Bitcoin, because although Bitcoin is an asset at the forefront of the industry, it is still struggling to gain mainstream cultural acceptance.

According to a recent report from equity research firm New Constructs, previous disclosures that Coinbase was expected to be worth as much as $100 billion were "absurd." The report points to the fact that the crypto market is still "young", which means that once the market matures and more competitors carve up market share with Coinbase, it will be difficult for Coinbase to maintain its market position and its prospects will not be as popular as people think. Enviable as expected.

Coinbase mentions in its S-1 listing filing that “crypto technology has the potential to be as revolutionary and widely adopted as the internet,” but New Constructs’ analysis argues that research shows crypto adoption is a long way off , two-thirds of U.S. adults are still “not interested” in cryptocurrencies, about 20% have never even heard of cryptocurrencies, and only 9% of U.S. adults have invested in cryptocurrencies.

And, despite the massive increase in bitcoin prices over the past twelve months, New Constructs believes that "Coinbase has little chance of meeting its lofty $100 billion valuation and earning its projected future profits." About a month ago , New Constructs CEO David Trainer said:

"As long as Wall Street keeps investor sentiment high, as long as you stay focused on stock prices and market cap, no one seems to worry about falling prices, but that's how Wall Street fails."

If David Trainer is right, will the Coinbase IPO flop? Ingo Fiedler, co-founder of Blockchain Research Lab, explained:

"Coinbase's share price is likely to become overly dependent on Bitcoin price, as Bitcoin trading revenue is critical to Coinbase's business success, and Bitcoin price is not dependent on Coinbase's share price."