An Ethereum ETH/USD wallet address purchased at least $400,000 worth of cryptocurrency tokens due to be listed by Coinbase Global Inc COIN a day before the official announcement was made.
What Happened: According to on-chain transactions highlighted by noted cryptocurrency trader Cobie on Twitter, the wallet acquired a significant amount of six tokens mentioned in Coinbase’s list of assets “under consideration” before the information was made public.
Found an ETH address that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published, rofl pic.twitter.com/5QlVTjl0Jp
— Cobie (@cobie) April 12, 2022
The tokens acquired were Indexed NDX/USD, Kromatika KROM/USD, DappRadar RADAR/USD, RAC RAC/USD, DFX Token DFX/USD and Paper PAPER/USD – each of which saw double-digit percentage gains on Tuesday.
The collective value of the wallet’s initial investment exceeded $570,000 at the time of writing, after seeing a 40% ROI in under 24 hours.
Why It Matters: Tokens named by Coinbase as potential candidates to be listed are known to rally significantly over the short term in a phenomenon that has come to be known as “The Coinbase effect.”
The Ethereum wallet’s curious purchases on Tuesday drove speculation that the buyer was a Coinbase insider with prior knowledge of the assets considered for listing.
As on-chain sleuth Zachxbt pointed out, this isn’t the first time a wallet made large purchases before a Coinbase listing announcement.
Don’t forget this one too https://t.co/jMgzKvl6mo
— zachxbt (@zachxbt) April 12, 2022
Price Action: According to data from Benzinga Pro, Coinbase shares closed 2.61% lower on Tuesday at a price of $149.85.
Photo courtesy: Coinbase