Analyzing the Crypto Exchange Pump Phenomenon

The “Coinbase Effect” has become a well-known phenomenon having positive effects on asset prices when new listings are announced. The economic rationale behind the effect is straightforward. When a cryptocurrency is listed on a popular exchange it immediately gains exposure to a new set of market participants. The effect has been thoroughly researched using Coinbase as the main exchange; however, in this report, we extend the scope to include five more exchanges in order to compare the listing effect across different trading venues. Additionally, considering that Coinbase is the largest retail onramp to crypto, the research includes an event study using a sample of Coinbase listings from the Messari Enterprise API. Event analysis offers a better understanding of the statistical properties of how the listing event affects the token’s returns, accounting for the influence of the market environment.