While the crypto market was stuck in a downtrend for a couple of days, XRP suddenly turned higher yesterday in response to a development at Coinbase. Today the No. 3 cryptocurrency by market cap is leading the broader cryptocurrency market higher after Coinbase announced it plans to list more cryptocurrencies on the exchange, leading investors to speculate that XRP will be next.
The U.S.-based crypto exchange said in a blog post it will soon start adding more cryptocurrencies to its platform. In order to comply with regulatory concerns in certain countries, Coinbase aims to limit the trading of some tokens to certain countries. According to the announcement:
“Today we’re announcing a new process that will allow us to rapidly list most digital assets that are compliant with local law, by satisfying listing requests in a jurisdiction-by-jurisdiction manner. In practice, this means some new assets listed on our platform may only be available to customers in select jurisdictions for a period of time.”
Dan Romero, vice president of Coinbase, discussed the development with CNBC, saying:
“When we talk to customers, their most important requirement is: Add more cryptocurrencies to the platform. And if you look at where we are today, we have five assets on the platform, and there are thousands of cryptocurrencies that we do not support. So, what we’re starting today, and I’m really excited to talk about it, is listing.coinbase.com. The new process will enable Coinbase to list many new assets that comply with local laws.”
The new process requires interested projects to apply for a Coinbase listing, which the exchange will then consider under its digital assets framework.
At first, no application fee will be charged. Depending on the scope of the submissions, however, Coinbase may in the future impose a listing fee to cover the legal and operational costs associated with the valuation and listing of new assets. Furthermore, Coinbase can, at its discretion, list some assets even if no application has been made.
The Coinbase Effect
Ripple fans have been waiting for a long time for Coinbase to list XRP, and while a listing hasn’t yet been announced, the market interpreted the news in a positive way. As the development unfolded, the price of XRP soared promptly by more than 11%, breaking through the recent bearish trend in which the coin has lost much of its phenomenal earnings from last week. Most recently, the XRP price is up by more than 20%.
Yesterday’s announcement does not guarantee that the exchange will list XRP, however. Meanwhile, XRP investors have long complained about Coinbase refusing to list the token though they still listed other small-cap cryptocurrencies.
The catalyst for the XRP price increase seems to be the “Coinbase effect.” For instance, over the summer, Coinbase announced that it was exploring the addition of five new cryptos to its platform, including Cardano (ADA), Basic Attention Token (BAT), Stellar (XLM), Zcash (ZEC) and 0x (ZRX). On the heels of the announcement, these coins soared by double-digits, mainly based on speculation.
Whether the current speculative pump will last is doubtful. But should XRP actually be listed on Coinbase in the next few weeks, the bull run could persist.