Coinbase is mostly for a US audience, and crypto is generally less useful in countries with a relatively stable currency and banking system. It doesn’t really matter to crypto prices whether or not coinbase exists.
> and crypto is generally less useful in countries with a relatively stable currency and banking system
Crypto is massively affected by say the USA because it is invested in as an asset class by major funds. One signal showing that is that ETH and BTC are highly correlated, sometimes even after news that you might expect to mainly affect only one of those two.
> It doesn’t really matter to crypto prices whether or not coinbase exists.
I am assuming the opposite: that Coinbase valuation depends on the ebullience of the general crypto market.
Note that I do believe that US retail has some effect on market prices, and strict SEC regulations will indirectly deter home investors (perhaps the raison d’être for the SEC actions), so SEC actions against Coinbase potentially do affect the market price for crypto somewhat (assuming some of the market valuation is dependent on wealthy investors such as people in the US).
There is a symbiosis and reflexivity (~recursion) between many of the elements in the system, and simplistic linear cause-and-effect thinking can be risky.
If there is any impact on crypto prices from coinbase shutting down, it would be a positive one as US crypto holders would no longer be able to cash out, forcing them to purchase goods and services directly with crypto.
ETH and BTC are corollated because most liquidity is in BTC for legacy reasons. Most likely this corellation will break down over time.
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