For some market observers, the embrace of Ethereum by exchange and wallet startup Coinbase was a long time coming.
Last month, the co-founder of one of the most heavily funded bitcoin startups, Coinbase, announced that its digital currency exchange would start trading ethers, the native cryptocurrency of the Ethereum network.
The move came after the startup hosted creator Vitalik Buterin at its headquarters for a presentation on Ethereum.
Yet it was the way co-founder Fred Ehrsam released the news – with a complete rebrand to one of the company’s core products accompanied by a strongly worded blog post that warned of bitcoin’s susceptibility to Ethereum, that triggered a strong response throughout the digital currency community.
Coinbase later said it accepted more than 2 million ethers in new deposits on its first day of accepting the digital currency. At the same time, critics of the move took to social media to voice their frustration over what some perceived to be a betrayal of the company’s initial user base.
But according to some industry observers, the decision was ultimately a practical one, following other startups in the bitcoin space that have begun developing products around Ethereum. A logical step
Gil Luria, head of technology research at Wedbush Securities, believes that Coinbase’s decision to enable Ethereum trades on its GDAX platform is in alignment with the company’s commitment to provide access to "whatever cryptocurrency made the most sense for its users".
But it is Ethereum’s potential use for managing smart contracts, prediction markets and decentralized organizations that Luria thinks most distinguished it for Coinbase.Luria told CoinDesk: "[Coinbase] avoided me-too alt coins such as Litecoin, but looks like they believe Ethereum is different. Since Ethereum has the potential to add significant functionality that may not be available on the bitcoin network, and since there is clearly robust demand for […]
