XRP is now available to retail investors on Coinbase and the Coinbase iOS and Android mobile apps. The move comes shortly after the exchange listed XRP on Coinbase Pro, its trading platform designed for more sophisticated users.
On Feb. 28th, Coinbase announced that users will now be able to buy, sell, send, and receive XRP on Coinbase.com, the exchange’s flagship service catered towards retail investors. The move will provide additional liquidity to the XRP markets and make the cryptocurrency available to a greater number of retail investors, especially in the US.
That said, for many, the listing has had less of an impact on XRP’s price than expected. Usually, when a coin is listed on Coinbase it experiences a sharp increase in price.
There are several examples of this in 2018. 24-hours after listing on Coinbase, 0x (ZRX), Ethereum Classic (ETC), and Basic Attention Token (BAT) were trading up at 15, 14, and 9 percent, respectively. Meanwhile, in 2019, XRP was up less than 4 percent following its listing on the exchange.
Considering that listing has a material impact on the price of a coin, if the cryptocurrency markets are anything like traditional securities then Coinbase may need to follow regulations to prevent insider trading and frontrunning. Moreover, this requires that Coinbase keeps decisions around listings secret until announced to the public.
Yet, trading activity seems to suggest that insider information about the XRP listing was leaked, allowing some traders to leverage the news for profit.
In traditional markets, regulations to prevent insider trading exist to both protect retail investors and to help maintain fair and competitive securities markets. If there was indeed an information leak—or worse, insider trading—then such an incident could increase the perceived regulatory risk of trading cryptocurrency, and consequently, reduce the likelihood that regulated financial institutions will participate in the crypto markets.
Nonetheless, the full listing on Coinbase is positive for both liquidity and access to XRP. The move may also prove advantageous for associated company Ripple, which is using its huge XRP reserves to finance ecosystem and technology development, potentially allowing the company to command a higher price for its XRP holdings as it sells them to institutional buyers.