Chainlink surged more than 100% in the last week from $2.03 to roughly $4,4 before retracing a little bit. This was due to it being listed on Coinbase and Coinbase Pro.
What is the “Coinbase effect”?
The “Coinbase effect”, this term was coined to describe the phenomenon where the price of a cryptocurrency increases after being listed on Coinbase. This phenomenon is definitely real as we have seen it play out in other cryptocurrencies as it is currently happening with Chainlink. This highly celebrated price surge began after Chainlink was first listed on Coinbase Pro. After three days, the price of the coin was up 117.2%. Almost all coins listed on Coinbase experience an increase in price following listing announcements.
Below is a list of coins that experienced the “Coinbase effect”:
- Litecoin – on May 3rd, 2017, experienced about 3.0% price increase.
- Bitcoin Cash – on Dec. 19, 2017, experienced 9.9% price surge.
- Augur – on Apr 17, 2019, increased by 15.3%.
- EOS – on May 30, 2019, increased by 10.1%.
The only exception to this report was the retail listing of Ripple XRP on Feb 28, 2019. The coin only rose by 0.22%. There is however evidence to show that there was a potential leak of the announcement and so this reduced the effect of its listing on Coinbase.
Enough on “Coinbase effect”, let’s get back to Chainlink. About 8 hours after its listing on Coinbase Pro, the coin experienced a 16.3% increase and then a 23.5% increase 12 hours later. LINK’s listing on Coinbase retail resulted in a 34.1% price increase and then 12 hours later, 62.8% price jump.
Coinbase is currently the third largest exchange by volume, having a 24-hour trading volume of $112 million. The coin is currently ranked #15 by market cap.