Coinbase Global (COIN) Starts Trading on NASDAQ, Binance to List Coinbase Stock Token Soon
Coinbase Global (COIN) has started trading on NASDAQ on April 14, 2021 (Wednesday), marking the debut of crypto in the stock market. Coinbase becomes the first-ever cryptocurrency company and exchange to go public.
After direct listing on the bourse, the price of each Coinbase Global (COIN) share opened at US$381. Within minutes of opening, the price rose to US$429.54, raising the stock’s valuation to more than US$100 billion. At the end of the first day of trading on NASDAQ, the stock price of COIN fell 14% below the opening price and closed at US$328.28. At closing, the stock’s valuation was around US$86 billion.
On Tuesday (April 13, 2021), the per-share reference price was set by NASDAQ at US$250. Coinbase used the direct listing route to go public. This means, the existing shareholders directly sold the stock to the public. The largest cryptocurrency exchange in the United States avoided the IPO listing route and therefore didn’t have to issue new shares in the process.
Coinbase went public at a time when the cryptocurrency prices almost across the board are witnessing a record-setting rally as well as a broadening adoption of digital assets. In 2021, the public debut of Coinbase was one of the most highly anticipated in the United States. In fact, the public and institutional interests in crypto have swelled in recent months.
Leading corporates such as Tesla (TSLA), PayPal (PYPL), BNY Mellon (BNY), and Square (SQ) have either invested heavily in Bitcoin (BTC) and added the largest cryptocurrency to their balance sheets or started facilitating transactions in cryptos.
Leading investment banks such as Morgan Stanley (MS) and Goldman Sachs (GS) have also announced recently that they will be offering their wealth management clients Bitcoin exposure.
In a note, Wedbush analyst Dan Ives, has said:
“Coinbase is a foundational piece of the crypto ecosystem and is a barometer for the growing mainstream adoption of bitcoin and crypto for the coming years in our opinion…Given the still nascent and volatile nature around Bitcoin we believe less than 5% of public companies will head down the Bitcoin investment path in some capacity over the next 12 to 18 months, but could move markedly higher as more regulation and acceptance of this currency takes hold further down the road.”
Coinbase’s listing took place on a day when Bitcoin price against the US Dollar (BTC/USD) hit an all-time high (ATH) at US$64,829, catapulting the global crypto market’s capitalization to more than US$2 trillion.
In its prospectus, Coinbase has said:
“Crypto has the potential to be as revolutionary and widely adopted as the internet. The unique properties of crypto assets naturally position them as digital alternatives to store of value analogs such as gold, enable the creation of an internet-based financial system, and provide a development platform for applications that are unimaginable today. These markets and asset classes collectively represent hundreds of trillions of dollars of value today.”
Over 43-million retail users and 7,000 institutions trade Bitcoin and other cryptos on Coinbase. A major part of its income comes from its transaction fees from the trade done by both the institutional clients and retail investors. In 2019, Coinbase’s net income was a loss of -U$30.4 million. However, in 2020, the net profit became +US$322.3 million. The net income of Coinbase increased from a mere US$$32.26-million in the first quarter of 2020 to around an estimated US$730–800-million in the first quarter of 2021.
Chief strategy officer at digital asset investment firm CoinShares, Meltem Demirors, has said:
“I firmly believe within the week it will be worth more than Goldman Sachs. Goldman today employs 40,000 people. It was founded in 1869, $120 billion market cap. Coinbase, founded in 2013, employs less than 4,000 people, and it’s going to have a bigger market cap.”
Interestingly, Binance has kept the enthusiasm high for crypto lovers by announcing to list the Coinbase Global token. The announcement says that the COIN/BUSD pair will be launched for trade soon and the date of commencement will be announced soon. The announcement further states that “Users will be able to trade fractional Coinbase stock on the Binance website.”
Binance’s announcement says:
“Binance will continue to respond to market demand by listing more stock tokens and features. Trading of stock tokens will follow traditional exchange hours and is not available for residents in Mainland China, Turkey and other restricted jurisdictions.”
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