An Ethereum (CRYPTO: ETH) wallet address purchased at least $400,000 worth of cryptocurrency tokens due to be listed by Coinbase Global Inc (NASDAQ: 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.
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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 (CRYPTO: NDX), Kromatika (CRYPTO: KROM), DappRadar (CRYPTO: RADAR), RAC (CRYPTO: RAC), DFX Token (CRYPTO: DFX) and Paper (CRYPTO: PAPER) – each of which saw double-digit percentage gains on Tuesday.
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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