Coinbase started its Nasdaq listing this morning in one of the most anticipated initial public offerings of 2021, as this is the first crypto exchange to go public. Many describe the listing as a “watershed” moment.
Nasdaq set a reference price of $250 per share for Coinbase on Tuesday, projecting a value for the largest U.S. cryptocurrency exchange at $49.19 billion “ahead of its landmark stock market debut on Wednesday,” according to a statement.
“With the bitcoin bull market, the pandemic, and one of the hottest equity markets we’ve had, it’s the perfect storm for Coinbase, which is why we see such a high valuation,” Ben Weiss, CEO of CoinFlip, the largest US crypto ATM In the U.S., tells GOBankingRates.
Bitcoin was at a record $63,500 this morning.
“Today is a big milestone for Coinbase and an even bigger milestone for crypto. Thank you to our employees and customers for getting us here. Together, we can build the cryptoeconomy and create economic freedom for all. Join us for today’s events,” the company tweeted this morning.
Today is a big milestone for Coinbase and an even bigger milestone for crypto. Thank you to our employees and customers for getting us here. Together, we can build the cryptoeconomy and create economic freedom for all. Join us for today's events at https://t.co/kki68arv3O $COIN pic.twitter.com/Bvcu9R0otq
— Coinbase (@coinbase) April 14, 2021
Because the company chose the direct listing option, shares will not be available right when the market opens but will become available mid-day or sometime in the afternoon, according to Decrypt. The direct listing enables employees and other insiders to have the option to sell their existing shares rather than the company issuing any new stock as would happen in a conventional initial public offering, Decrypt adds. Coinbase last month earmarked 114.9 million shares for its listing.
The company, started in 2012, compares itself to Google in the IPO filing with the Securities and Exchange Commission: “Today, we are a leading provider of end-to-end financial infrastructure and technology for the cryptoeconomy. Customers around the world discover and begin their journeys with crypto through Coinbase. In the early days of the internet, Google democratized access to information through its user-friendly search engine, enabling virtually any user with an internet connection to discover the world’s information. Similarly, Coinbase is democratizing access to the cryptoeconomy by enabling anyone with an internet connection to easily and securely invest in and use crypto assets,” it says.
CoinFlip’s Weiss tells GOBankingRates that “if you have heard about bitcoin, you have likely heard about Coinbase.”
“These two are currently synonymous and the Coinbase IPO is banking on both the hot markets of tech stocks as well as one of bitcoin’s biggest bull runs. Coinbase has more users than the majority of banks around the world, and the reception from the public, which will likely give a very high yet fair valuation, will possibly dictate if bitcoin, and crypto companies, can be treated like, or better than, banks,” Weiss says.
In its earnings release last week, Coinbase said it was expecting meaningful growth in 2021 driven by transaction and custody revenue given the increased institutional interest in the crypto asset class. For the first quarter of 2021, the company had revenue of $1.8 billion and 56 million verified users, according to its release.
Weiss also tells GOBankingRates that the biggest ramifications of Coinbase going public are the legitimacy it brings to the industry and how it will allow investors a new way to get involved in bitcoin without holding the asset.
“There’s also rumors that Kraken and BlockFi are also looking to make themselves publicly tradable in the near future, so this will help set a precedence of what to expect for crypto giants that are going public. With this, we will also be able to better look at the volatility between cryptocurrency markets and the performance of crypto brokers and exchanges like Coinbase,” Weiss adds.
Peter Cohan, a lecturer of strategy at Babson College and author most recently of “Goliath Strikes Back,” echoes the sentiment, telling GOBankingRates that if the company’s direct listing is successful, “it will infect the financial universe with a bad case of FOMO. That will cause more capital to flow into the space of normalizing crypto from people who want to get in on Coinbase’s action.”
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