In a recent blog post, Coinbase announced their intention of accepting ERC20 Tokens. ERC20 is an ethereum token standard that defines a common list of rules for all the ethereum tokens to follow. With this standard, you can create your own cryptocurrency. Right now, more than 70% of the token sales were made on the Ethereum blockchain using the ERC20 protocol. Coinbase declared that their decision was made in order to accept ERC20 assets as Coinbase products.
What could this mean for the cryptocurrency market?
These are great news for cryptocurrency enthusiasts. There are a lot of cryptocurrencies that deserved a place on Coinbase and didn’t had that chance. This could also lead the way to a new wave of people investing in cryptocurrencies. Until now, the options were pretty limited on Coinbase and most of the new investors were sticking to the cryptocurrencies listed there. Now, they will have a wide variety of options, leading to people investing in different cryptocurrencies. But the cryptocurrencies won’t be added to Coinbase at first :
“Coinbase will only list assets after they are listed on GDAX. After evaluating factors such as liquidity, price stability, and other market health metrics, we may choose to add any ERC20 asset added to GDAX to the Coinbase platform,”
Therefore, probably only the most valuable ERC20 tokens will be listed on Coinbase. If a cryptocurrency was added and accepted on GDAX – that doesn’t mean that it will also be listed on Coinbase. For investors with more than $10 Million in a certain ERC20 token – you may be interested to find out that the Coinbase Custody will open its gates for new deposits and withdrawals – probably more cryptocurrencies than it will be listed on GDAX.
This was a long expected moment by the cryptocurrency community. Coinbase supporting certain ERC20 tokens could bring new investors to the market. As Coinbase also have the Custody service, we may see a lot of big companies investing in the cryptocurrency market in the future.