Coinbase Will Now List as Many Coins as Possible

Getting listed on Coinbase is no longer a stamp of approval.

Until recently, if Coinbase listed a cryptocurrency, it was viewed as a stamp of approval and often pushed up the coin's price. But Americans' favorite cryptocurrency exchange has changed its stance. Rather than being a gatekeeper, Coinbase now wants to list as many digital currencies as it can.

CEO Brian Armstrong tweeted in June that Coinbase's goal was to list every asset it was legally able to. "Outside of our listing standards (for safety/legality), we don't offer an opinion on the value of each asset," he said.

"We are asset agnostic, because we believe in free markets and that consumers should have choice in the cryptoeconomy. This is how we'll have the most innovation."

Coinbase's change in tune

The reason for Coinbase's new approach is simple. Investors want access to a wider range of coins, and if Coinbase doesn't provide it, investors will move to its competitors. That's why Coinbase says it wants to be the first to issue new coins. The idea is to provide the site's users with access, but not validation.

Coinbase currently lists around 70 currencies in the U.S., though they're not all available in every state. Armstrong told CNBC in April that the company is considering listing 100 more coins.

Armstrong has stressed that investors should not take a Coinbase listing as an endorsement of any kind. He also promised that the leading cryptocurrency exchange would provide tools in the future to help investors evaluate individual currencies.

Coinbase's new direction makes sense from a business perspective. But for investors, it's never been more important to do your own research.

Do your own research

Remember that cryptocurrencies are highly volatile and relatively untested investments. And unlike securities that list on the stock exchange, there's very little regulation controlling cryptocurrencies. For example, listed companies need to meet SEC reporting requirements. Cryptocurrencies don't.

Put simply, individual investors have to do their own due diligence, especially if exchanges aren't going to vet the coins they list. Here are some other things to look for:

• Who's behind the currency and what their credentials are: Look at other projects they've been involved with, and pay attention to anything even remotely suspicious.
• What the crypto says it will do and what problems it's trying to solve: You'll find a lot of information in its white paper. Don't worry if the language seems technical at first, the more you read, the more you will understand. But it is important to persevere.
• Whether the information is well presented and makes sense: Watch out for typos or things that don't quite ring true. For example, if a currency uses a method you've never heard of to validate its transactions, you'll need to do more digging.
• How much money it has raised and what its market cap is: The market cap is the total number of coins in circulation multiplied by the price of the coin. It gives you a good idea of how volatile the coin might be, and how much influence larger players might have on the price.
• What you can learn from the tokenomics: How many tokens will be released? How will they be released? And how will people be incentivized to participate in the network?

There are many things in the crypto world that we can't control, from the latest celebrity tweet to a whole nation banning cryptocurrency services. And the industry is still developing, so we don't know which currencies will come out on top. The technology still has a way to go before it reaches its full potential.

Cryptocurrency investments will always be risky. But if you do your research, you have a better chance of picking coins that will perform well in the long term.