Coinbase is the topic of Wall Street as the largest cryptocurrency platform in the United States prepares for its public debut on a traditional stock exchange on Wednesday, using a direct listing.
There is no doubt that Coinbase’s public offering is a big deal in the world of cryptography. The company was created just over a decade ago with the genesis of bitcoin BTCUSD,
and it is now in the midst of a time that many in the industry have described as a turning point.
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There are few ways to get direct ownership of cryptocurrencies, other than buying them directly, a service that Coinbase offers for a commission, and it looks like investors are willing to pay.
Coinbase, whose users deal primarily with bitcoins and ethereum, reported last week that its revenue rose 847% in the first quarter to $ 1.8 billion and now has 56 million verified users.
Leeor Shimron, an analyst at FundStrat Global Advisors, described the Coinbase listing as seminal. “Coinbase’s direct listing is a turning point for the crypto industry.”
Wedbush analyst Dan Ives said the listing reflects the main evolution of the crypt.
“Coinbase is a key piece of the cryptographic ecosystem and is a barometer for the widespread widespread adoption of Bitcoin and cryptography for years to come in our opinion,” he wrote in a research note on Tuesday.
There is a caution that Coinbase’s implicit valuations as a cryptocurrency exchange are too high, compared to traditional stock exchanges such as Nasdaq Inc. NDAQ,
where Coinbase will directly list and Intercontinental Exchange ICE,
the parent company of the New York Stock Exchange.
In a direct listing, a company floats its shares on a stock exchange, but without hiring banks to subscribe to the transaction, as in an IPO.
This is what you need to know about the next offer.
What is Coinbase?
The Silicon Valley cryptographic exchange was co-founded in 2012 by Brian Armstrong, 38, who runs the platform as executive director. Fred Ehrsam, director of Coinbase, also helped create the company.
According to Forbes, Armstrong’s networth is currently $ 6.5 billion depending on his ownership of the company and his wealth is likely to increase if the direct price is shot up successfully.
When will Coinbase be made public?
Coinbase will appear on April 14th. The exact timing of the list is unclear, however Palantir Technologies Inc..’s PLTR,
the direct quote in September saw its first operation after 1:30 p.m.
Where will it appear?
Coinbase will be listed on the Nasdaq under the symbol “COIN” as a direct listing, which means it does not raise new money, as a company with a traditional IPO would do.
Coinbase is the first direct listing on the Nasdaq, with Spotify SPOT,
Slack Technologies WORKS,
and most recently Palantir Technologies PLTR,
all choose to list directly on the NYSE.
Ratings?
Nasdaq gave Coinbase a benchmark price of $ 250 per share on Wednesday evening, valuing it at more than $ 65 billion.
Some bulls project a valuation of $ 100 billion or better, which will make it bigger than a number of U.S. exchanges, including ICE, Nasdaq, CME Group CME,
and Cboe Global Markets CBOE,
David Trainer, CEO of New Constructs, an investment research firm, said the value of the cryptographic platform is ridiculously high. “While Coinbase’s revenue has increased over the past twelve months, the company has little chance of meeting future profit expectations that add to its ridiculously high expected valuation of $ 100 billion,” he said.
“The $ 100 billion forecast projected by Coinbase implies that its revenue will be 1.5 times the combined revenue for 2020 of two of the most established markets in the market, Nasdaq Inc. (NDAQ) and Intercontinental Exchange (ICE), l “parent company of the New York Stock Exchange,” he said.
Trainer said that according to his calculation, Coinbase’s valuation should be closer to $ 18.9 billion, a decrease of 81% from the projected valuation of $ 100 billion.
“Not for the faint of heart”
Moffett Nathanson analyst Lisa Ellis told MarketWatch why the offer is, as she describes it “not for the faint of heart,” but why she started exchanging coverage on a purchase with a price $ 600 target, even before you see your first trade on the Nasdaq.
“I’m super bullish at Coinbase … because you get the feeling that they’re market leaders in space and crypto agnostic,” he said.
That said, it recognizes that currently 90% of Coinbase’s revenue is derived directly from retail, most in the United States and trade focuses primarily on the two largest cryptocurrencies: bitcoin and Ether ETHUSD,
in the ethereum blockchain.
“So the implications are that Coinbase’s revenue is correlated with the level of cryptocurrency activity and, most importantly, bitcoin and ether.”
Ellis says investors should have at least a one-year long-term investment strategy in bitcoin, which could still reach zero for some bearish accounts, but the three-year outlook is even better, because the complex Cryptographic has tended to operate in three-year boom cycles and after bust.
Validation for a cryptography or a top?
Some bulls consider Coinbase as a validation for the nascent crpyto industry.
Alex Mashinsky, head of the Celsius Network trading and cryptocurrency protection platform, said:
“We see the Coinbase listing as an additional validation of the space and an important public relations opportunity for the entire industry to shine as the future of finance,” he told MarketWatch via email.
“Coinbase has more users and more revenue than many of Wall Street’s top players and is more profitable than any major exchange, and that validation puts most skeptics at a crossroads who have to re-evaluate their denial and frustration. in the face of the disruption it causes them.
Others suggest it could turn out to be a new market summit and subject prices to cryptocurrencies under a precipitous rise in recent days and a new bitcoin record.
Yves Lamoureux, president of Montreal-based macroeconomic research firm Lamoureux & Co., told MarketWatch that he fears there is too much euphoria around bitcoin and cryptocurrency and that, as a result, he considers it necessary a reduction. “Can you find someone with a bearish point of view?” he asked. “A resounding no,” Lamoureux said.
Is Coinbase the largest cryptocurrency exchange?
Coinbase is the second largest cryptocurrency platform, but the largest in the United States, by volume. According to CoinMarketCap.com, the largest stock is Binance, which records a cryptocurrency trading volume of $ 47 billion over a 24-hour period.
Who else owns Coinbase?
Venture capital firm Andreessen Horowitz is the largest owner of Coinbase, with 25% of Class A shares and 14 %% of Class B shares. And Marc Andreessen, head of the venture capital team, forms part of the Coinbase board.
Other facts
For those looking for an even deeper dive into Coinbase, check out the five things MarketWatch needs to know about the company.