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Coinbase settles at $86bn value on Nasdaq, helping bitcoin hit new record

Spiking volumes on crypto derivatives exchanges was touted as a possible reason for Bitcoin's rise. Photo: Reuters

(ATF) Cryptocurrency exchange Coinbase made its public equity market debut on Nasdaq on Wednesday April 14 and closed the day at a value of $86 billion, after reaching $112 billion at one point. A listing that highlighted how digital assets are going mainstream helped bitcoin hit a new record price near $65,000, before easing to around $62,000.

Bitcoin enthusiasts noted that the price of the digital asset on Wednesday took it above some measures of the value of long established currencies such as sterling or the Australian dollar and close to the total worth of silver.

Coinbase’s stock market debut was done through a direct listing where no shares are sold ahead of the opening.

Coinbase’s stock opened at $381 per share, up 52% from a reference price of $250 per share set on Tuesday, though only 10.9% above the $343.58 volume-weighted average price Coinbase’s shares were trading at privately in the first quarter of 2021.

Goldman Sachs, JPMorgan, Allen & Co and Citi advised on the offering.

The stock closed at $328.28, which gives Coinbase a fully diluted valuation of almost $86 billion, including unvested stock options and restricted stocks, and a market capitalisation of $65 billion.

This is roughly the same as New York Stock Exchange (NYSE) owner Intercontinental Exchange, which has a market cap of around $66 billion, and more than the market value of Nasdaq, the exchange that beat the NYSE to the Coinbase listing mandate in part by offering the crypto firm the ticker COIN.

Founded in 2012, San Francisco-based Coinbase has 56 million users globally and an estimated $223 billion of assets on its platform, accounting for 11.3% of crypto asset market share, its regulatory filings claimed.

“We’re just very grateful to be able to bring transparency to the crypto economy, the ecosystem that we’ve all been building over the last 10 years,” Coinbase chief financial officer Alesia Haas said.

“It just brings this level of recognition that this is an industry that is here, that is growing, and that (is not just) in the corners.”

Valued at $6bn last September

Coinbase was valued at just under $6 billion as recently as September 2020, but has surged at an even faster pace than bitcoin’s gains since then.

The world’s biggest and best-known cryptocurrency has more than doubled in value this year as companies such as as Tesla endorsed its use, and hit a new record of almost $65,000 on Wednesday, before falling back in line with Coinbase’s equity price.

Coinbase’s most recent financial results underscore how revenues have moved in lock-step with the rally in bitcoin trading volumes and price.

In the first quarter of the year, as bitcoin rose in price, Coinbase estimated revenue of over $1.8 billion and net income between $730 million and $800 million, versus revenue of $1.3 billion for all of 2020.

“The correlation to bitcoin will be very high after the stock stabilises after listing,” Larry Cermak, director of research at crypto website The Block told Reuters.

“When the price of bitcoin goes down, it’s inevitable that Coinbase’s revenue and inherently the price of the stock will decline as well.”

Regulatory risks also loom as Coinbase increases the number of digital assets users can trade on its platform.

Coinbase last year suspended trading in major digital currency XRP after US regulators charged associated blockchain firm Ripple with a $1.3 billion unregistered securities offering. Ripple denied the charges.

Coinbase has also paid the Commodity Futures Trading Commission $6.5 million, after the agency said the company reported inaccurate transaction data and that a former employee engaged in improper trades.



Jon Macaskill

Jon Macaskill has over 25 years experience covering financial markets from New York and London. He won the State Street press award for 'Best Editorial Comment' in 2016


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