Coinbase and the Awkwardness of Growing Up

Many expressed shock that Coinbase would degrade its brand by supporting what some deem low-quality assets; others celebrated that a broader range of options would soon be on offer; some liked the general plan but disapproved of the details.

"Exchanges" of all shapes and sizes are dotted around the world, and many enable trading of a bewildering array of assets, and some offer licensed services.

In traditional finance, investors interact with exchanges through their broker-dealers or similar.

The need to capture and retain clients is fundamental to an exchange's survival.

In the young world of digital assets, the services offered by exchanges have a material impact on new investors' choices.

What's more, setting up accounts on other exchanges has gotten easier over the past year, even with stricter identification requirements.

In the light of intensifying competition and an increasingly demanding client base, as well as the difficulty of bringing in new investors in this bear market, Coinbase has taken what seems like a sensible business decision: diversify the offering, and give existing clients what they want.

Just the possibility of listing on Coinbase is enough to send a token's price up.

If Coinbase then decides to not support a particular asset and its price falls, the company could find itself - fairly or unfairly - vulnerable to an investigation by the U.S. Securities and Exchange Commission and/or investor lawsuits for market manipulation.

Coinbase CEO Brian Armstrong and team at Bitcoin2014 image via CoinDesk archives.