Coinbase Theory
Coinbase Theory is a very simple theory. It is based in opportunity, supply, and demand. There are thousands of Alt Coins floating around on different exchanges. Many investors frequent the exchanges daily; there are also many other investors that do not. A lot of interested individuals (and yes Individuals are primarily driving the bitcoin boom currently) are seeking to put money into Crypto Currency, but they are not experienced in trading on exchanges—and many individuals I speak with are very hazy on even what exactly Crypto Currency is. Realistically, many of these new investors will not be trading for alt coins on a given exchange any time soon.
However, what these investors do have is some money—and most of them have heard enough to know that Bitcoin is King Coin. Picture this: An individual with little-to-no experience in trading crypto coins, internet access, and a bank account makes up majority of America. When these potentially interested investors learn about Crypto, I would argue majority of the time it is Bitcoin that has peeked their interest. And when their curiosity inevitably leads them to ask: “But how would I buy Bitcoin?” My findings [December 2017] have indicated that the most common advice is, “Coinbase”.
Coinbase is like an online department store for bitcoin. It is clean, professional, secure, trustworthy (well, mostly—their Bitcoin Cash fiasco was a little questionable), and their products are well advertised and prominently displayed. Now, I say “Department Store” because they no-longer just sell bitcoin, they also offer other items. The 19th century rise of the Department store was rooted in the successful tactic of bringing customers into the store by offering them the select goods they are seeking. But once the potential customers were in the store, they saw a number of displays offering other fine products. It was in the sale of these extra items that department stores began to really see success. These other items alone were not enough to lure potential customers in, but they were capable of coming off the shelves at a slower rate than the high-demand items, simply because of the exposure.
Coinbase gets new investors in by offering Bitcoin for Dollars. However, Bitcoin is expensive, and although an investor may be interested in it, a little hesitation is natural. This is where Coinbase introduces some of its Other Fine Products: Ethereum and Litecoin.
Do not overlook this importance: the “Alternatives to Bitcoin” are shrunk down from thousands, to two.
That means that anyone new to Crypto with a Coinbase account that is looking to diversify has essentially two options to choose from. Like shelf-space at a department store, this is very, very valuable real estate for both Litecoin and Ethereum.
Coinbase Theory is this: An option on Coinbase will sell because of the exposure. One could argue that perhaps this has overvalued Ethereum and Litecoin already; One could argue that exposure is exposure and the rise of these coins will only make them more alluring. What I do know is this: if a new coin comes to Coinbase, it will go up in value. Wait until there is confirmation from Coinbase first before anticipating a rise in value.
[There are rumors that Ripple (XRP) might be the next coin.] If this is confirmed, don't feel foolish grabbing some from the exchanges. [Sleeper: GNT Golem]
Although there is no hard evidence at the moment, some groups believe DASH, Bitcoin Cash, Monero, or ZCash could also be added.
**This is simply my Theory. I am very confident in it. **
There is no spoon.