Coinbase & BitFlyer's next move...

There could be a nice trade you can make to profit from this BitFlyer news, and it will involve picking an alt-coin which may benefit from things Coinbase and BitFlyer will do next!

The news this week was BitFlyer from Japan had obtained a NY license for crypto-currency, the 4th one issued. Coinbase is one of those 4 as well. These two will now compete with each other. This is important bc these two will be competing to attract large institutional investors-- aka funds in New York City for instance. Large multi-billion dollar institutions would add lots of liquidity and trading fees to Coinbase and BitFlyer, thus would be a great boon for them. But there's a much bigger prize than just commissions at stake; Coinbase wishes to become the "New York Stock Exchange" of crypto-currency trading. What does that mean? How does it benefit Coinbase? How can you trade to take advantage of Coinbase's desires?

Coinbase is almost considered a WALLET more than an exchange by many retail traders in the US. They think of Coinbase as the safe place to store their bitcoin online, but when they want to actually "TRADE", they send bitcoin or ether from Coinbase to an exchange like Poloniex or Bittrex or Kraken. It's on these more comprehensive exchanges they can get their hands on shitcoins like UNIT or alt-tokens like Golem. Coinbase and BitFlyer don't want to traffic in "shitcoins", so they keep a tight lid on what you can trade and why. You see, they aim to service the high-end financial institutions (like even the CME and CBOE!) with GDAX, their exchange. Coinbase's GDAX is their version of the New York Stock Exchange, and Coinbase wishes to monpolize the trading in the absolute best "securities" ("tokens" "crypto-currencies" "coins" "ICOs"). So far, Coinbase has limited GDAX to the most well-known well-respected cryptocurrency coins like Bitcoin, the first, and Ether, the most well-backed by recognizable names. They will CONTINUE this practise, in order to maintain their air of superiority over all the other exchanges. It's a very old and common "white-shoe" approach to attract "blue-blood" money, as well as put a damper on scams and scamsters. They serve the purpose of keeping this whole crypto phenomena "clean" and on the "up and up". It's a valiant effort, but make no mistake there's profits to be made from this strategy of monopolization and Bitflyer and Coinbase are "in it to win it". In exchanges, you see, "there can be only one (McCloud)". What we mean, is there's eventually only going to be one or two major exchanges in the end, whom provide the market liquidity-- it's the natural way of things in business/economics.

So what's going to happen? Coinbase, now with a competitor BitFlyer who's already on record saying they're going to introduce a few more coins/tokens to trade in 2018, will need to respond the same way or else risk losing funds. Even institutional investors are human, and would like to speculate in more risky tokens/coins, so the white-shoe market who provides more high-end tokens to trade will gain customers. This is BitFlyer's strategy in invading US shores. But each new added token or altcoin requires some work for Coinbase/GDAX or BitFlyer to add to their trading stack, they must provide something called "custodial services" to their institutional clients. Won't go into details on custody, but essentially it means Coinbase can gaurantee it's institutional investor-customers that deposited funds indeed are held at Coinbase in good faith. This "custody" term, you see, is also used in stock/equity world. It's basically an ordered system where big broker-dealers can provide customers and regulators of proof where the stocks are held. You see, stocks are commodities, in the old days you handed over actual stock certificates to the buyer under the old Tree at Wall Street, but that system was improved to involve less physical space and carrying around heavy loads of stock paper known as shares. Nowadays it's all digital. Oh God, you're asleep again. Ok, back to how you can make money on this...

When Coinbase and BitFlyer choose the next alt-coin to trade on their exchanges, this will create demand for those tokens by institutions who own dollars, bitcoins, and ether and wish to speculate further in cryptos. This is bc Coinbase customers are large, similar to customers at Goldman Sachs or JP Morgan. When they get into stuff, it's with large amounts of money. So now you know the mechanism, but which cryptos will Coinbase and BitFlyer choose next, and how will they decide?

#1 Market Cap
Notice the coins Coinbase trades already: Bitcoin, Ethereum, Litecoin. They are 3 of the biggest market caps in cryptoland. They are also the most well-backed-- as in, they have "investors" and founders who're at least well known "rockstars" in the crypto world or venture capital world.

#2 Backers
Already mentioned above, part of being "white shoe" is having well-known almost "celebrity" backers and founders.
Ethereum, for instance, has Vitalik Buterin who has been attached to bitcoin and ether from the beginning days. So your job is to first look at the top of the market cap ranks, and determine which cryptos are "white shoe" enough to attract the likes of Coinbase and BitFlyer. The most obvious candidates out of the box are Ripple and Stellar. Both are very similar, but they have been attempting to cater to currency exchange to large banks. The nature of Ripple and Stellar users being large banks, lends perfectly to what Coinbase will be interested. Bitcoincash, despite now being the #3 sized crypto, has backers Coinbase hasn't liked from the very beginning. Coinbase is begrudgingly supporting bitcoincash mainly bc it now represents about 10% of all bitcoin holdings, and Coinbase has ALL their customers asking for their fair distriubtion of this windfall. While Coinbase may support bitcoincash operations, it's unlikely they'll put it on their GDAX exchange right away, bc Coinbase management likely expects their release of bitcoincash funds to cause BCH price to drop drastically in 2018. If by some miracle BCH prices remain steady, Coinbase MAY reconsider. But really they are just hoping it goes away.

#3 White shoe only
There's a shortlist of "darkcoins" who pride themselves on anonymity. This is contrary to Coinbase and BitFlyer's desire to always remain legal. Coinbase doesn't wish to associate with members of PirateBay or other para-legal members of the crypto community. This is why Dash, Zcash, and Monero aren't the best of candidates to gain entry on the GDAX market.

We leave it to your research abilities and knowledge to find these white-shoe cryptos which may begin trading on GDAX in the first half of 2018. What we're telling you, is try to sell your bitcoin and buy a smattering of what the media labels "altcoins". One idea is to just look for exchanges who are just ahead of Coinbase, in servicing new coins. For instance, Ripple is traded on BitStamp, who also only really trades in "the big 3" (BTC, ETH, LTC). If BitStamp has already vetted Ripple as white-shoe, then you can trust Coinbase and BitFlyer might do the same, right?

We wish you good luck, and hope your altcoins outperform bitcoin over the next 6 months!

Definitions:
"alt-coin" This is symbolic really, the altcoins have same properties as bitcoin and ether, but the media likes to paint them in a lesser light bc they never had the first-mover advantage. It's really just a media term.