0x (ZRX) has become the 6th cryptocurrency to be listed on Coinbase, the biggest exchange headquartered in the United States. Since ZRX went live for trading on Coinbase its price has surged from USD 0.70 to USD 0.95 as of this writing on 17 October 2018, and briefly as high as USD 1.04, a nearly 50% price increase. ZRX has climbed up the ranks on CoinMarketCap to #22 with a USD 511 million market cap. This can be called the Coinbase Effect, and was observed in the past when Ethereum, Litecoin, Bitcoin Cash, and Ethereum Classic were added to Coinbase.
Other examples of the Coinbase Effect include Ethereum Classic, which jumped 25% on 11 June 2018, generating a USD 300 million increase of Ethereum Classic’s market cap. In the 2 months following its listing on Coinbase, Ethereum Classic’s market cap surged a total of USD 800 million. The ultimate example of the Coinbase Effect, so far, is when Bitcoin Cash was listed on 19 December 2017 and rallied 140% within a day, generating an increase in market cap of USD 42 billion. When Ethereum was added to Coinbase on 21 July 2016 it surged 30%, and when Litecoin was added to Coinbase on 3 May 2017 it rallied 130% in about a week, and 220% total during the first 1.5 months after being listed.
Buying and selling of ZRX officially started on Coinbase on 16 October 2018, 5 days after ZRX launched on Coinbase Pro. Now ZRX is available on Coinbase’s website, as well as its Android and iPhone apps, making it easy to buy across the United States. This has led to a direct increase in demand for ZRX, with daily trading volume spiking from USD 10 million on 16 October just prior to the Coinbase listing, to USD 143 million currently.
While some of the ZRX price increase can be attributed to speculation that ZRX’s price would rise due to being listed on Coinbase, users on Coinbase have a true thirst for diversifying their portfolios beyond the 5 major cryptos previously listed on Coinbase, including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Ethereum Classic. ZRX is the first ERC-20 token to be listed on Coinbase, so its users can finally add an ERC-20 token to their portfolio.
Several other top cryptos are ERC-20 tokens, and these will likely be added to Coinbase in the coming months. It will be easy for Coinbase to add other ERC-20 tokens since they use the same backbone technology as ZRX. Further, Coinbase announced in September 2018 that they will be adding all possible cryptos that are popular and legal, setting the precedent for adding numerous other cryptos, to compete with exchanges like Huobi and Binance which have hundreds of cryptos.
As seen with the ZRX listing, the Coinbase Effect can cause a drastic increase in a crypto’s price and market cap. As Coinbase progressively adds more cryptos, the Coinbase effect could lead to an overall increase in the crypto market cap. The ZRX listing alone has so far led to a USD 100+ million market cap increase.
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