In a first for the industry, popular cryptocurrency exchange Coinbase will go live on the Nasdaq stock exchange.The recent listings are a historic moment. Many experts believe the listings will lead to even more listings in the coming months.
This year has already been a good one for the company.With their first quarter of 2021 coming to an end, the company generated over $1.8 billion in revenue.By comparison, the company made $1.3 billion in revenue over the whole of 2020.
It is the first fully-fledged cryptocurrency-related company to make this move. The company ticker will trade as “COIN” on the stock exchange.A billion dollars was last placed in the company's valuation.Nasdaq gave it a reference price of $250.
“The biggest IPO in history”
Don Tapscott, Executive Chairman of the Blockchain Research Institute has called the COINBASE IPO “the biggest IPO in history.”
“It’ll mint 1,000 millionaires who will reinvest their windfall into this industry accelerating the adoption of this tech. It’ll also be the first and only large cap company institutions will feel comfortable owning and they’ll buy it in droves,” he told BeInCrypto.
Tapscott also believes this could lead to more listings from other bigger organizations in the future.
“It’s a shot across the bow of Wall Street and it might not even be the biggest exchange out there,” Tapscott says.
“By listing on a major stock market index, Coinbase brings attention and investment to the crypto space from a range of new sources,” he explained and added:
“Traditional financiers can now point to Coinbase as an example of a properly vetted and publicly traded crypto asset company when reaching out to new market entrants whether those are limited partners, new investors, or other firms. With this attention, will come greater responsibility and regulation.”
As AllianceBlock's CEO and founder, Rachid Ajaja explains, his firm's listing will also bring much-anticipated legitimacy to the cryptocurrency space.
“As the largest and most public-facing American crypto business, Coinbase’s listing brings further publicity and legitimacy to the entire industry. Coinbase acts as a gateway to crypto for many retail investors, and the goal for DeFi projects is to now convert that attention into users,” Ajaja shared with BeInCrypto.
Coinbase listing eyes mass adoption
Coinbase is entering uncharted territory.Despite this, experts are hopeful that this new era could lead to positive outcomes for the crypto community.
“This could be viewed as the end of the beginning, or introductory phase of the evolution of the industry.It's time to go mass adoption!,” thinks COO and head of Polyient Capital at Polyient, Eric Kapfhammer.
Chairman of the European Blockchain Association, Michael Gebert, believes these changes will begin as more cryptocurrency institutions following suit. Gebert told BeInCrypto:
“The fact that Coinbase reached a valuation of around $90 billion in its final week of trading on Nasdaq’s private market will be a huge motivation for other crypto exchanges and market participants to adopt this strategy.”
Gebert states that the decision for Coinbase to list directly mitigates issues such as lock-up periods, “thus enabling insiders to sell their shares on the very day the company is publicly listed.”
“Since Coinbase is initially not able to issue any new shares, the equity ratio is safe from becoming diluted quickly with the effect that existing shareholders will not lose any of the company ownership percentages they are currently holding,” he said.
While only time will ultimately tell if this decision is right or wrong, Sheraz Ahmed of STORM Partners believes the move is a bullish one for the industry as a whole.
“Even though Coinbase is the first, I foresee that we will soon have many more companies of the likes going public over the next couple of years. The return of the bull market has brought a new wave of interest and money, and now with institutions finally here, the sky is the limit,” Ahmed says.
Cryptocurrency industry finally being recognized
Industry experts see the listing of Coinbase as a major turning point for the industry.The company has the opportunity to distinguish itself in the traditional financial landscape.
Kapfhammer says that the listing will add credibility to the industry.A certain lack has existed over the years, especially among traditional financial institutions.
However, with the rapid growth of the market over the last year.All eyes will be on opening day as the industry begins to expand.
“Many crypto supporters and investors are invested in the success of this IPO, and its effects will be felt across the sector. Will it be a success? In a sense, merely getting to this stage, a public listing stock, is an incredible achievement in itself,” says Kapfhammer.
With Coinbase taking the next step in global adoption, all industry participants will be waving their flags for the company, as it leads the way.
Capital markets will now need to realize and accept that cryptocurrency companies are here to stay.According to Kapfhammer, the move may be a step in the right direction for investing in other cryptocurrency enterprises down the road, leading to more consumer acceptance.
IPO symbolizes market maturity
The Coinbase listing signifies the first step in global acceptance for an industry that the capital markets have continuously criticized.Branches of finance have finally taken notice of this.
“You can expect maturation in the space, both in terms of investment flows, as well as the expansion and development of new services with the accompanying infrastructure,” Kapfhammer explains.
Some in the crypto community could see the listing as a sell-out to the established order.In this case, Ahmed explains that it isn’t the case.
He says that although listing on a stock exchange seems to be the antithesis of disintermediation via blockchain technology, one must master the rules before breaking them.
The ability for a cryptocurrency exchange to list on a major stock exchange is no small feat.It's especially hard to do that in a heavily regulated country like the United States.The public listing is a significant milestone and victory for the market regardless of how the IPO performs.