Meme Stonks - The Daily Gwei #270

It's all memes? Always has been.

Centralized exchanges come in many different flavors but the one major thing that separates them in the eyes of most users is what assets they offer. “Offshore” exchanges like Binance, FTX, Kucoin and more normally list assets much faster than their heavily regulated counterparts (Coinbase, Gemini, Kraken etc). This allows these offshore exchanges to obtain a significant advantage over the regulated ones but this has been changing over the last few months.

Honestly, I never thought I’d see Coinbase list one of the random dog tokens on their exchange. Not only is the token completely “pointless”, but Coinbase listing it basically adds “legitimacy” to it in a certain way. Now don’t get me wrong, Coinbase is free to list whatever assets they want, but what are the standards here? Will Coinbase and other “top tier” exchanges just begin listing every random ERC20 token? Will they list borderline scams? How do they even differentiate between a scam and something like SHIB? Well, there’s no point speculating about what assets Coinbase will list in the future - the answer is obvious - assets will simply be listed based on how much expected trading volume and user acquisitions it will lead to for an exchange.

In saying the above, I don’t think Coinbase is at fault here - we’re seeing this trend play out across all types of markets - “meme” stocks and cryptoassets tend to do very well because there’s a certain powerful magic to memes. We saw all of this play out with Dogecoin and its “offspring”, random tokens on BSC like ‘CumRocket’ (yes, it’s a thing) and who could forget SAFEMOON - a token that TikTok fell absolutely in love with. This really is what the future of financial markets looks like unless governments clamp down on this (I’m not generally in favor of financial regulations, but don’t think for a second that governments won’t eventually come down on this sort of stuff).

One thing to note about all of this is that decentralized exchanges really change the game here - all of these meme tokens were able to get off the ground because of exchanges like Uniswap where any asset can be “listed” and anyone in the world can speculate on these assets. This means that even if centralized exchanges don’t list these assets, they are still able to achieve billions in market cap with impressive trading volumes (SHIB had 24 hour trading volumes of over $1 billion on Uniswap at one point). So really, in SHIB’s case, Coinbase is actually late to the party here because they have to go through a presumably lengthy legal review process before they can list new assets.

All in all, this is now the new frontier thanks to Ethereum, decentralized finance and crypto in general. A permissionless programmable blockchain can be used for anything - not just what a specific group of people deem to be “valuable” or “useful”. After all, there were plenty of people who made lots of money from these meme assets - one guy even made hundreds of millions off of SHIB with an initial investment of just $2,500!

Have a great day everyone,
Anthony Sassano

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All information presented above is for educational purposes only and should not be taken as investment advice.