Coinbase may hold balances from the hard fork from 2016, potentially awarding them to wallet holders who did not withdraw the coins.
The last time Coinbase was asked about adding new assets in March, no new coins were submitted for review. So the addition of Ethereum Classic (ETC) was a welcomed decision, making the asset begin another upward trend after drifting sideways for months.
Ethereum Classic is a project that has developed itself outside the spotlight, yet remains solid enough to be included in many investment options. And now, Coinbase has decided to move on to add the asset for direct purchase on a fully legalized market, accessible to US buyers. Here are the five most probable reasons why Ethereum Classic was chosen:
Fitting the Digital Asset Framework: Ethereum Classic fits most of the points in the Digital Asset Framework, a document used to estimate the stability and promise of digital assets. Items include organic adoption, as airdropped coins or hard forks have different rules. Since Ethereum Classic has survived for two years after the fork, it is starting to look like a separate altcoin, not one attempting to force its way with exchanges. But other factors such as liquidity, adoption, a good team with a clear roadmap, put Ethereum Classic on the radar, sending it for review and acceptance to the Coinbase executive team.
Healthy Trading Volumes: Ethereum Classic has proven to be more than a one-off sensation. The project has managed to enter exchanges while the crypto market was still farther from mainstream attention. This means that Ethereum Classic is not a one-off wonder, and may offer more reasonable volatility, due to the larger number of market participants. Ethereum Classic volumes have fluctuated between $1 million and above $6 million in 24 hours. This is relatively low, but the levels have remained more consistent compared to more widely traded coins which then see negligible volumes.
It Was Already on the Books: Coinbase is still keeping balances from the DAO hard fork back in 2016. Some users may have withdrawn coins, but others would find a nice gift sitting in their wallets, ready for trading and potentially reaching for the moon, or at least performing well enough in the short term. With a familiar name and a relatively wide community, Ethereum Classic is certain to spark interest. Let’s not forget that Litecoin was added to Coinbase before starting its phenomenal climb last year.
Accepted by Regulators: Coinbase is careful not to list assets that may be deemed securities. And since Ethereum Classic is a platform asset and a utility coin, it would have no such problems. At the same time, Ripple (XRP) was facing increased scrutiny and more arguments that it could be seen as a security. Recently, Ethereum Classic also became one of the assets approved by the Thailand market authorities, along with Stellar (XLM), increasing its foothold in Asia.
A Known Technology: Unlike NANO, Ripple, and a handful of tokens, Ethereum Classic has a proven wallet and is a known technology, with no unexpected glitches. Projects like TRON (TRX) have also expressed interest, as well as OmiseGo (OMG), but so far, Coinbase stuck to the familiar and time-tested. Some believe Ethereum Classic is a relatively boring coin, but it is present in derivative instruments, such as the Grayscale Capital crypto-derived investment fund. And for the users of Coinbase, this may be a welcome addition to diversifying their portfolios.
Certainly, Ethereum Classic has its network of critics and detractors, and is seen as a bit of a boring asset. The current criticism is that the Ethereum Classic is seeing only a handful of transactions, and its network has a lowered hashrate. But the renewed popularity of Coinbase may create new interest in this asset, as it did with Litecoin, making it more significant in the crypto ecosystem. However, the listing does not guarantee a higher price, as some token owners may decide to sell after receiving their balances.