• Matthew Mancini

Coinbase Goes Public


Coinbase’s IPO made it the first cryptocurrency exchange to go public (Source: Forbes)


By Matthew Mancini

April 18th, 2021


Coinbase Global, Inc (NASDAQ: COIN), the largest U.S. cryptocurrency exchange, went public on Wednesday 4/14 and is now valued at $85.8 billion. It is the first cryptocurrency exchange to go public and went public through a direct listing.


The Initial Public Offering (IPO) of Coinbase was a whirlwind day for trading. Nasdaq put them at a reference price of $250. Following the market open on Wednesday, the stock opened 52% higher at $381 before skyrocketing to $429.45 within the first few minutes of trading. The stock hit a low of around $310 before closing the session at $328.28.


Back in 2018, Coinbase had a valuation of $8 billion which means an increase of 10x toward its current valuation. The company’s valuation is one of the biggest being traded to date – with only 93 companies on the S&P 500 having higher market value, according to Associated Press.


Some bullish investors are predicting a valuation of over $100 billion or better, which would make it valued higher than other U.S. exchange operators like Intercontinental Exchange (NYSE: ICE), the parent company of the New York Stock Exchange, and CME Group (NASDAQ: CME), valued at $65.05 billion and $73.48 billion respectively.


David Trainer, CEO of the investment research firm New Constructs, said the company’s valuation is obnoxiously high. He stated that “Coinbase’s expected valuation of $100 billion implies that its revenue will be 1.5 [times] the combined 2020 revenues of two of the most established exchanges in the marketplace,” more specifically, ICE and Nasdaq.


There may be skepticism surrounding Coinbase’s market valuation, but their trading debut is still very important to the cryptocurrency space because the offering is the first of its kind. The Coinbase IPO is legitimizing digital assets and could affect the ETF market.


Canada already has a Bitcoin ETF which has proven to be very successful recently. BNY Mellon’s Global Head of ETFs, Ben Slavin, told Yahoo Finance that Coinbase’s IPO could potentially increase the chances of there being a U.S. Bitcoin ETF.


References:

https://www.forbes.com/advisor/investing/coinbase-ipo-direct-listing/


https://www.msuwma.com/team/matthew-mancini-


https://finance.yahoo.com/quote/COIN?p=COIN&.tsrc=fin-srch


https://www.cnbc.com/2021/04/14/coinbase-to-debut-on-nasdaq-in-direct-listing.html


https://www.wsj.com/articles/coinbase-stock-price-valuation-and-everything-else-you-need-to-know-11618413312


https://www.cnbc.com/2018/10/30/cryptocurrency-start-up-coinbase-valued-at-8-billion-despite-bitcoins-plunge.html


https://apnews.com/article/coinbase-stock-ipo-price-c3b802074ce4349b5bccf9ba43022800


https://finance.yahoo.com/quote/ICE?p=ICE&.tsrc=fin-srch


https://finance.yahoo.com/quote/CME?.tsrc=applewf


https://www.marketwatch.com/story/coinbase-ipo-everything-you-need-to-know-about-the-watershed-moment-in-crypto-11618350086


https://finance.yahoo.com/video/coinbase-ipo-game-changer-big-212434887.html