The crypto market is one of the most competitive environments imaginable. With companies, cryptocurrencies and organizations fighting each other to increase their market share. In such a hostile environment, only the most capable companies can survive. Therefore, it is not surprising to learn that one of these companies, Coinbase, drives the Maker (MKR) price.
The Coinbase effect
If in life it is usually difficult to know who to trust, in the crypto market it is even more difficult. Well, since there is no type of governing body that governs the market. Trusting the wrong exchange, or investing in a cryptocurrency with no future, can lead to serious financial losses.
Therefore, reputation ends up being the main asset for companies and crypto assets alike. Well, only the best valued organizations and currencies will be recipients of investments that enter the crypto market. While the rest will be overshadowed, as they are considered unreliable by investors and users alike.
Thus, a term has emerged lately in vogue within the crypto world, known as the “Coinbase effect”. It would consist of a boost in the price of cryptocurrencies that are beginning to be exchanged on the Coinbase platform. Which see their price increase several times, between the time of the announcement of their inclusion in the exchange, and their release on the market.
This would be due to Coinbase’s solid reputation in the crypto market, as the main crypto exchange in the United States. So, if the company endorses a crypto asset, this gives investors the signal that it is trustworthy.
The Maker case
The last case of the Coinbase effect, has been the cryptocurrency Maker. Which was announced on May 28 of this year that it will start trading on the exchange starting on June 9. Starting since then a bullish rally that has allowed it to increase its price by 30%. Going from $ 351.89 per MKR to $ 531.37, stabilizing around the $ 451.42 at which it is currently trading.
The case of Maker would not be at all novel within the crypto market. Well, just a few weeks ago, another cryptocurrency experienced the so-called Coinbase effect. When OmiseGo, a crypto asset with less track record and reputation than Maker, managed to increase its price by more than 200%. From the moment its incorporation to the North American exchange was announced, until the day it was effectively listed on it.
Coinbase has already announced that it will start accepting deposits in Maker starting this June 8. Being available, initially, only the MKR-BTC and MKR-USD pairs to carry out operations. Performing a phased incorporation, as clarified by Coinbase:
“Trading on our MKR-USD and MKR-BTC order books will begin in phases, starting with the ‘post-only’ mode, then moving to full trading if our metrics for a healthy market are met“
Therefore, and given the conditions in the market. Maker’s price is likely to follow the path set by other assets listed on Coinbase. Gradually increasing its price until June 9, when a last boost to its price lives in its opening.