Coinbase Going Public Brings A “Very Good Influx of Extremely High-Quality Money” Says FalconX CEO
Even the most conservative treasuries are coming in, not for Bitcoin exposure yet, but for yield generation, which is much more efficient in crypto than the traditional market, said Raghu Yarlagadda.
- Coinbase Global Inc., the largest US cryptocurrency exchange, has postponed its plan to go public from this month to April.
- The company is taking a direct listing route instead of going the traditional initial public offering (IPO). Coinbase will be listed on the Nasdaq.
Based on private market transactions, Coinbase received a valuation of around $68 billion, which is more than 8x of the $8 billion valuation it got during its private funding in 2018. This implied valuation eclipses that of Nasdaq, the London Stock Exchange, and NYSE’s parent ICE and is near CME Group.
Thus far, Coinbase backers have registered as many as 114.9 shares, trading hands at prices ranging from $200 to $375.01, per the filing.
A “Defining Moment”
According to crypto exchange FalconX CEO Raghu Yarlagadda, Coinbase listing is a “defining moment” and this push back is also good for crypto as an industry. Coinbase Venture, the investment arm of the exchange, is actually an investor in FalconX. Yarlagadda during his interview with Bloomberg said,
“If you look at the source of funding that is shaping the industry it's like either selling tokens for your future cash flows or venture capital money. Now analysts for the first time saw a company that incubated 8 years back, go all the way to public market listing at 70 billion dollars a plus.”
“What that means is for a lot of traditional venture capitalists, it's a nice validation of what the space could mean. As a result, we are seeing a very good influx of extremely high-quality money. I think that's very powerful.”
Revenue is Shooting Up
The platform FalconX, which defined itself as a “one-stop-shop built specifically for institutions,” also raised $50 million earlier this month from Tiger Global and B Capital Group, which Yarlagadda said they will be using “primarily” for scaling up engineering teams and on the customer success side so that they have a good experience.
Sharing the growth the company has been seeing amidst the broad crypto market uptrend, Yarlagadda said in less than a year with just a team of 40-45 people, they have to scale their transaction volumes to about $6 billion on a monthly basis and grew 15x in terms of revenue, and welcomed about a hundred or so institutions.
Regulatory clarity, according to him, will be “really powerful for institutions,” bringing more of them in. Already, over the last six months, there has been a lot of inbound from major banks, not just from the US but worldwide, he said.
A lot of Activity, Fortune 500 Companies are in
The crypto market is currently worth more than $1.73 trillion while trading around $53k; Bitcoin is also keeping above the $1 trillion market cap mark since early March.
While Yarlagadda didn’t give his Bitcoin price target, he pointed that this time “there is a much more fundamental shift than what we saw in 2017,” within the backdrop of central banks printing unprecedented amounts of money.
Besides the institutions and big names like Stanley Druckenmiller and Paul Tudor Jones, we are also seeing the tokenization of the US dollar in the form of stablecoins resulting in them experimenting with Ethereum and other assets, he said.
While we have seen the first wave of companies putting BTC in treasuries starting October, it has only been them just dipping their toes, with most of them keeping 1-2%.
“There's a lot more activity. I mean, we are in conversations with a meaningful number of Fortune 500 companies. Now some of them are really skeptical. They're like yeah, I mean bitcoin exposure. Tell us about Bitcoin,” said Yarlagadda adding, even the most conservative are interested but not yet for Bitcoin exposure.
They are looking at yield generating in crypto, which is “much much more efficient than what you're seeing in the traditional markets.”