Gold 1764,37
|
EURUSD 1,1964
|
DJIA 33909,50
|
OIL.WTI 63,645
|
DAX 15298,50
|
---|
There was an interesting event on Wednesday that could start a new phase in the development of cryptocurrencies. We are of course talking about the IPO of Coinbase, the second largest cryptocurrency exchange. What is the significance of this moment and why should we look again at cryptocurrencies?
BTC
We all remember well how throughout the formative years of cryptocurrencies, the US Securities and Exchange Commission refused to register Bitcoin instruments on more than one occasion. Now, amid these bans, Coinbase’s entry onto the exchange is a strategic victory. The fact that the SEC has approved the exchange’s application for a listing suggests that the SEC no longer perceives the business as “toxic” and uncontrollable. It is therefore safe to say that cryptocurrencies have been given another good signal to move forward. The introduction of digital currencies into the global financial economy is unavoidable.
Already quite a few “new” and traditional investors are starting to move into the camp of cryptocurrency supporters. Tesla has decided to sell cars for Bitcoins, and the total capitalisation of the major cryptocurrency is already estimated at more than a trillion US dollars.
So what will happen next? Clearly Coinbase going public will give investors the opportunity to invest indirectly in digital assets and further boost interest in cryptocurrencies.
But there are some doubts that many things could go wrong. Firstly, whether the company will be able to realise its long-term goals, namely to restructure the global financial system by widely introducing cryptocurrencies into all areas of business. After all, there will be a large number of regulators standing in their way who are not yet ready for this. Second, the vast majority of exchange revenues are commissions, so the share price will be highly correlated with trading volumes, and prolonged crypto winters can negatively affect a company’s financial health. Third, there are still enough security issues in the cryptocurrency world that it could be a catalyst for a future loss of confidence in the industry.
Coinbase’s IPO has now been compared to Netscape’s listing, which is seen as the beginning of the so-called dot-com boom. The cryptocurrency world and Coinbase still have a long way to go. The exchange itself stresses that growth and future development depends on a large number of factors that are difficult to predict and evaluate.
04.00 Gross domestic product in China YTD
11.00 EU benchmark consumer price index YTD
16.00 University of Michigan Consumer Confidence Index for April
Important Notes on This Publication:
The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.