With Coinbase set to go public tomorrow, April 14th, What are some potential effects on the Crypto and DeFi ecosystems?

Coinbase, the largest US-based cryptocurrency exchange will go public via direct listing tomorrow April 14th. As a Centralized exchange, Coinbase has a lot of fans as well as detractors but it’s popularity is in no doubt. Last week, the company released their 2021 first quarter numbers and it blew expectations out of the water. They reported adding 13 million verified users since the end of 2021 and added 147.8% in total asset value held on the exchange. Not only that, but they reported a whopping $1.8 billion in first quarter revenue, compared to $1.3 billion for all of 2020. Those numbers are mind blowing and exemplify the massive growing interest in the cryptocurrency space.

The biggest question at hand is:

What are some ways this could impact the Crypto and DeFi space?

One major positive I can think of is that it will be a way to gauge the traditional markets interest in crypto-related companies and also helps to legitimize crypto in the world’s most important financial market. With Robinhood planning to go public later this year and Kraken in 2022, 2021 promises to be a big year in the traditional markets for crypto, which could lead to a lot more attention on DeFi as more traditional investors discover what they consider insane yields compared to their steady 7% APY growth. Overall, I think the attention and new users this will bring is very bullish for crypto in general.

For the sake of fairness, I also see what could be a negative as this could pull liquidity and capital away from pouring into the actual crypto market, as traditional investors could see investing in Coinbase as sufficient exposure to crypto without the need to understand particulars about underlying assets.

Another thing that can't be ignored is that this is another instance of a centralized company making huge headways in a space that is known for decentralization. It's not inconceivable that Coinbase could be researching their own chain similar to what Binance has with BSC, which could threaten the DeFi space even more if it can provide yields attractive enough to prevent people from looking further into decentralized options.

I wrote a longer article on the topic here.

Thoughts?