The next chapter in cryptographic fashion will be crucial.
Coinbase will make its public market debut on Wednesday at a valuation of between $ 50 billion and $ 100 billion, larger than major stock exchanges such as the Nasdaq and Intercontinental Exchange, the parent company of the New York Stock Exchange .
The move could force investors and institutions to closely examine the entire digital asset space, Amplify ETF founder and CEO Christian Magoon said Monday on CNBC’s “ETF Edge.”
“There could be a revaluation for this entire segment higher if you look at some of the figures coming from Coinbase,” said Magoon, whose blockchain-focused Amplify Transformational Data Sharing (BLOK) ETF will likely add Coinbase to its participations after the debut.
Coinbase’s revenue during the first quarter of 2021 was 1.5 times its revenue for the whole of 2020. It is the largest cryptocurrency exchange in the United States and will be the first of its kind to enter the public sphere.
“I think we’ll see more private companies go public because they see the path, hopefully, that Coinbase is taking that recognizes the value of the public market,” Magoon said.
In addition, at least four publicly traded fund issuers have applied for cryptocurrency-related ETFs in the past two months that could take advantage of what will likely be the largest public company in the industry, Magoon said.
“This will be a new asset class in the ETF space that will be built beyond the two or three existing funds today,” he said, adding that there are many possibilities that ETFs can innovate and innovate. ‘Ark Invest buy there too.
Investors simply “can’t ignore” a company that made its profits again year after year, Matt Hougan, chief investment officer at Bitwise Asset Management, said in the same “ETF Edge” interview.
“You just don’t see that kind of large-cap equity growth,” said Hougan, whose company manages the Bitwise 10 Crypto Index Fund (BITW). “All investors, not just investors in cryptography, will have to take this growth into account, think about where it is going and decide if it belongs in a portfolio, and that only makes it a game changer where cryptography exists in the market. of total capital. spectrum “.
Hougan compared the concerns about Coinbase’s listing to those of retail investors on Facebook’s 2012 IPO, which was also made public at a $ 100 billion valuation.
“People said the valuation was absurd. People didn’t trust it because they were hooded kids serving a new audience they didn’t know. That’s the same thing here. It’s a giant company that generates real revenue and real benefits, ”he said. “I think those assessments may not be as absurd as people think. It’s that people aren’t comfortable with this corner of the economy in the same way they didn’t feel comfortable with Facebook in 2012.”
The valuation conversation will likely not just stop at purely cryptocurrency companies, said Tim Seymour, founder and chief investment officer of Seymour Asset Management, in the same “ETF Edge” interview.
“This is a frontier that multiples of what people are willing to pay don’t make sense. What’s the multiple charged to Square or other companies that have talked about being able to do bitcoin and cryptocurrency transactions?” Said Seymour. “Here we can name all the companies that have had a significant increase in market capitalization.”
“Then, look, it’s exciting,” he said. “It’s exciting to have this pure game. I think that’s really the point, and where it’s going to be installed will also be another issue. I mean, think about the movement we’ve had in the underlying currencies, especially outside of bitcoin and even all in the broader digital token landscape, all focused on NFTs, and you get the perfect storm here for that valuation, which is all over the map. “
Bitcoin hit a new all-time high on Tuesday ahead of the list. The cryptocurrency has risen nearly 118% this year, according to Coin Metrics.
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