Many coin projects hope for a Coinbase listing as a way to boost exchange rate. Broader markets mean more liquidity, which in turn means more investor interest.

Many coin projects hope for a Coinbase listing as a way to boost exchange rate. Broader markets mean more liquidity, which in turn means more investor interest. I'd like to offer a counterpoint: that Coinbase listing is likely to kill the tokens that get listed. Shitcoin speculators are attracted to volatility, not technical merit. The wilder the swings, the more engaged they become. By adding liqudiity to a token, Coinbase dampens volatility. Projects must then compete on technical merit, which means most will fade away as new tokens not listed on Coinbase emerge. Second, shitcoin speculators trade with the understanding that they can evade taxes by trading on unregulated exchanges. By muscling out competitors, Coinbase will drive middle tier exchanges out of business. Given its strict guidelines around AML/KYC, Coinbase will make it very difficult for speculators to conceal their tax liabilities. This in turn will drive out most speculators who will see little advantage of cryptocurrency over traditional forex or penny stocks. Bottom line, this move will not increase demand for trading more mature tokens, but dry it up. Speculation will instead take place on thinly traded, unregulated exchanges.