US Cryptocurrency Exchange, Coinbase, Aims to Make History With The Largest IPO Ever
Based on the pre-IPO market of Coinbase on FTX, the exchange is trading at a whopping $150bn valuation, as CBSE/USD oscillates between $612 and $575.
The biggest cryptocurrency exchange in the US, Coinbase Global Inc., is expected to go public via a direct listing tomorrow at a staggering valuation of $100 billion.
It is already worth more than the combined value of the New York Stock Exchange (NYSE) and Nasdaq Stock Market.
Company founders Brian Armstrong and Fred Ehrsam own stakes worth $15 billion and $2 billion respectively.
However, crypto exchange FTX’s proxy market implies Coinbase to be the largest IPO, in history, with a valuation of $150 billion.
While this may seem like an overblown valuation to some, especially those outside the crypto scene, Coinbase justifies these sky-high valuations thanks to its first-quarter profit of $800 million. The San Francisco-based company's revenue for the first three months was more than double the $1.3 billion recorded for the entire last year.
“Coinbase will be the biggest public pure-play cryptocurrency company, full stop,” said Matt Kennedy, senior IPO market strategist at Renaissance Capital, which runs the Renaissance Capital IPO ETF (IPO).
Coinbase is being priced like a cryptocurrency instead of like a stock. Makes perfect sense if you think about it.
— Mati Greenspan (tweets ≠ financial advice) (@MatiGreenspan) April 12, 2021
Coinbase boasts 56 million verified users, adding about 13k new retail customers a day. With investors hungry for crypto exposure, Coinbase is expected to provide the perfect beta play to its attractive volatility.
“Coinbase is going to blow people’s minds,” said Matt Hougan, CIO at Bitwise Asset Management. “I think it’s going to force traditional finance to wrestle with the phenomenal growth that is taking place in crypto.”
Besides the retail, Coinbase’s institutional customers are also growing at a fast pace; as a matter of fact, in both 2020 and Q1 of 2021, they have so far grown more than the retail. Coinbase was also the one who helped Tesla, MicroStrategy, Meitu, Ruffer Investments, Paul Tudor Jones, and many more.
“That’s going to be the Holy Grail for them if they can hold on to that business because those folks are seen more as holders than traders,” said Julie Chariell, a senior analyst at Bloomberg Intelligence.
While many are bullish on this listing, several are bearish as well, expecting it to mark a local top.
According to QCP Capital, Asia’s crypto traders, this IPO could be a key catalyst event for Bitcoin to run higher, but at the same time, “we're extremely wary that the IPO on Wednesday could ultimately reveal too much short-term froth in the system and begin the seasonal mid-month decline.” BTC 0.16% Bitcoin / USD BTCUSD $ 43,989.25
$70.380.16% Volume 32.05 b Change $70.38 Open $43,989.25 Circulating 18.82 m Market Cap 828.09 b 17 h China’s Leading Crypto Exchange, Huobi, Custodies More than $1 Billion in Assets 19 h Google Searches for Bitcoin Hit Dec 2020 Level, Interest in NFTs Surpass DeFi Significantly and Matched Ethereum Briefly 19 h New Jersey Regulators Extend Enforcement on BlockFi BIA Ban to December 1st
The seasonal intra-month pattern has been performing like clockwork this year — a month-end bottom leading into a mid-month top followed by a correction, rinse and repeat.
Meanwhile, spillover from Coinbase hype can be seen in exchange tokens BNB and FTT, soaring 1,330% and 795% YTD respectively. BNB -1.90% Binance Coin / USD BNBUSD $ 370.54
-$7.04-1.90% Volume 1.5 b Change -$7.04 Open $370.54 Circulating 168.14 m Market Cap 62.3 b 18 h Wormhole Launches Solana-Ethereum Bridge to Move NFTs Cross-Chain 3 d Even Ethereum Layer 2 Solutions Are Earning Significantly Higher Fee Revenue than Bitcoin 6 d It Isn’t Layer 1 or Layer 2, It’s Time for LayerZero ETH -4.33% Ethereum / USD ETHUSD $ 2,985.68
-$129.28-4.33% Volume 16.72 b Change -$129.28 Open $2,985.68 Circulating 117.65 m Market Cap 351.27 b 14 h 1Inch Moves to Arbitrum For Faster Throughput And Lower Gas Fees 18 h Wormhole Launches Solana-Ethereum Bridge to Move NFTs Cross-Chain 19 h Google Searches for Bitcoin Hit Dec 2020 Level, Interest in NFTs Surpass DeFi Significantly and Matched Ethereum Briefly
“Worth noting that ETH’s traction was only ever ~50k users or so, though billions of dollars of capital. I don’t think it’ll replace ETH — it’s too centralized — but I do think it put a really serious dent in ETH’s narrative of dominance.”