Coinbase is an application which allows for the purchasing and selling of Bitcoin, Ethereum, and Litecoin. These can be purchased with fiat (real world) cash like USD or GBP. They are many people’s first step to purchasing a cryptocurrency. Among veteran traders Coinbase is considered a beginners tool which does not offer the functionality, speed, or low fees that other competitors like Gemini or Bitpanda (the one I sometimes use). LocalBitcoins is also a worthwhile consideration in terms of the amount of privacy it gives.
Coinbase is no.1 – the positives:
1.This means that more laypeople and sole traders are getting Bitcoin. This is a good thing as civilian adoption often leads to corporate adoption which leads to Bitcoin being accepted as a genuine payment system for more businesses. Nothing raises the value of a coin like real-world usability.
2.Bitcoin, Ethereum, and Litecoin will be here for a long time. These are the only three coins Coinbase sells so naturally, now, should be valued higher as more people are willing to purchase them. It also means that they could be seeing even bigger gains sometime soon (they all already had large rises recently).
3.This is good for Ethereum tokens. Tokens are coins which are built on-top of the Ethereum technology, allowing developers to use Ethereum’s tools to help their project. With Ethereum being more popular due to Coinbase the tokens likely will be too.
4.The mainstream is ready for crypto. No longer will trading crypto be looked down upon by stock traders, brokers, and other financial behemoths. This could be the small thing that gives crypto the legitimate look that it has been trying to get for years.
Coinbase is no.1 – the negatives:
1.Major adoption of Bitcoin will drive transaction fees waaay up as well as waiting times. Already, Bitcoin’s fees and waiting times make it unusable as a currency to some. This will be the same for Ethereum but to a lesser extent.
2.When everybody knows about crypto, that’s when we should be worried. Some doomsayers argue that the unknowledgeable and inattentive masses suddenly investing is a bad thing and can only mean that the bubble is about to burst and crash. This could be true, and looking at data from other bubbles makes it seem true, but there is no solid basis for this happening with crypto just yet (or ever). Some say we are nowhere near the magnitude that the Wallstreet crash or the Dot-Com bubble was at. Others say that crypto isn’t even a bubble anyway and that the power of blockchain technology alone is enough to keep cryptocurrenies usable for decades or even centuries.
3.People are buying into Bitcoin while it’s at an all-time high. They are simply assuming that it will rise more instead of fall, but they are on shaky ground as falling is much more likely first and they may not have the stomach for holding long enough. Many people will lose money and they won’t know why.
Be mindful of buying on an all-time-high and advise others to, perhaps, wait for a dip to purchase. If people you know have already bought, advise them to expect a fall and to not to panic. There’s a high chance that Bitcoin will continue to rise so they may be in for some profits down the road.
As cryptocurrencies are a largely unregulated market it is up to us as knowledgeable individuals to keep checks and balances, and overall give it a great face to the financial sector. If not for the technology itself then for our own profits.