Despite the market downturn, with Bitcoin and other altcoins dropping 15% in the past 48 hours, Coinbase has decided to make an unexpected announcement, quickly pushing up the price of Ethereum Classic.
Coinbase Announces Ethereum Classic Support
At 6:18 PST on June the 11th, Coinbase announced that it has plans to add Ethereum Classic (ETC). According to the official Coinbase blog, employees just got the notice that they will begin to engineer the proper support systems for the release of ETC on the exchange’s services.
The blog stated:
As part of this process, customers can expect to see public-facing APIs and other signs that the asset (ETC) is being added.
The blog also added that the official launch date of full support for this altcoin will be announced through the proper social media channels in the upcoming months, specifically saying:
When we reach the final testing phase of the technical integration, which we expect to occur over the next few months, we will publicly announce a launch date for trading via our blog and Twitter.
Full support will entail the addition of ETC to CoinbasePro (GDAX) and Coinbase’s more traditional exchange service. As well, Coinbase also has plans to add Ethereum Classic into the other services it provides. One of these services being its custody service, which was announced in November last year.
As well, ETC will be added to the Coinbase Index Fund, which is comprised of all of the assets listed on Coinbase services. The index fund was launched earlier this year with retail and institutional investors in mind. Currently, the minimum investment into the index fund is $250,000 for any U.S. accredited investors. The release of this fund allowed for traditional investors to gain access to some of the top cryptocurrencies in an easy to access manner.
However, Coinbase also noted that it will be releasing the Ethereum Classic obtained from Ethereum holders during the 2016 ETH/ETC hardfork. This announcement has many users relieved, as certain users will finally be able to reunite with their ‘lost’ Ethereum Classic.
If you take a few minutes to scour the respective cryptocurrency subreddits, it becomes apparent that there are many stories of Ethereum users not being able to access the vast amount of ETC they should have had.
On the release of this announcement, volume surged for ETC, along with the price. With the price of the cryptocurrency moving from $12.5 to $16 within the matter of a few minutes. Just one hour after the release of the announcement, daily volume for the altcoin doubled, rising from $120 million to $280 million.
Coinbase Takes Precautions to Mitigate Manipulation Risks
Coinbase is undoubtedly one of the largest exchanges in the world, with by far the most media presence. Last December, representatives from the exchange announced that they would be adding Bitcoin Cash to their services.
At the time, this seemed like an innocent announcement, but it was later revealed that this was far from the case. Prior to the official public announcement, Coinbase insiders bought Bitcoin Cash, causing a suspicious increase in volume and price.
Once the official announcement was released to the public, the price of Bitcoin Cash rose by over 125% within a few hours. Many reports suggest that the Coinbase insiders sold at the top, which sparked an internal investigation.
After this debacle, Coinbase executives thought it would be best to make important announcements to a majority of their employees and to the public simultaneously. This move has greatly reduced the risk of price manipulation prior to the release of such a large announcement.
As well, any employees who were aware of these plans prior to the announcement were subject to a ‘trading blackout’, ensuring that insider trading was of no risk. It is clear to see that Coinbase has taken the proper precautions to make sure that announcements following December 2017 are as seamless as possible.
Many have begun to speculate that this addition will be positive for the cryptocurrency space, with Coinbase often drawing open the eyes, and wallets, of many investors, part of the industry or not.