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Coinbase Goes Public With Initial Valuation Topping $100B

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What You Need to Know

  • Coinbase is the first pure-play crypto company to trade publicly.
  • Its debut listing on the Nasdaq paves the way for more retail and institutional investors to buy into the crypto market.
  • Cryptocurrency investors see the listing as a defining moment for the crypto market.

Coinbase, the largest U.S. exchange for Bitcoin and other cryptocurrencies, went public Wednesday, opening at $381 a share, far above the $250-per-share reference price set by Nasdaq, where the stock debuted with the ticker COIN.

At its opening price Coinbase was valued over $99 billion, almost four times the value of the Nasdaq itself, before topping $400 a share, then retreating.

More than 50 cryptocurrencies trade on Coinbase.

Hours before the Coinbase started trading on Wednesday at around 1:30 p.m. Eastern, Bitcoin, which trades 24 hours, surged to around $64,000. By midday it, the cryptocurrency had retreated to slightly over $62,000.

Raghu Yarlagadda, co-founder and CEO of FalconX, an institutional crypto trading platform, called today’s Coinbase debut a “defining moment” for the crypto industry that not only creates one of the largest publicly traded companies, providing the company with the resources to attract more retail investors, but also paves the way for more institutional investors to move into the crypto space.

The Coinbase debut will also mean “more scrutiny from regulators,” which ultimately means better framework that will attract institutional investors, said Yarlagadda.

“Bigger, better stronger companies will be built,” he said.

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Matt Hougan, chief investment officer at Bitwise Asset Management, which sponsors several cryptocurrency funds, likened the Coinbase debut to the IPO of Facebook, which went public at about $100 billion. Like Facebook, Coinbase is “tapping into a large new market …. in a breakthrough industry,” Hougan said.

The Coinbase listing paves the way for investors who want to own crypto assets in a more traditional way, via a publicly traded stock.

“It can be challenging to own crypto assets, but here is a large liquid pure play company that sits at the center of an emerging crypto economy,” said Hougan. ‘You will see more listing and more interest. This is a wake up call for a lot of traditional investors about how large and how fast growing the crypto ecosystem has become. “

Alex Tapscott, managing director of digital asset group at Ninepoint Partners, an asset manager  based in Toronto, Ontario, said,  “A new asset class has emerged that will only accelerate interest and adoption of Bitcoin and crypto assets.”

Coinbase debuted on the Nasdaq as a direct listing rather than an IPO or SPAC, which means there were no intermediaries like investment bank underwriters involved before and no lockup period after. Its CEO, Brian Armstrong, told CNBC’s Andrew Ross Sorkin that he chose that route because he wanted  there to be “a true market on day one that set the price… a price that the market had decided.”

By 2:54 p.m., the market decided that Coinbase, which had started trading less than two hours before, was worth $336 a share. It closed at $328.28.

(Photo: Bloomberg)