Coinbase is the first major cryptocurrency firm to go public and list its shares in the US stock exchange.
The first day of the Coinbase listing was very similar to the cryptocurrency market, very volatile. The price hit lows like $310 and highs like $429.Coinbase closed the day at $328.28 and got a total value of $85.7 billion, over ten times higher than it was rated as a private company.
The platform started trading at $381 per share on Wednesday. This value was more than 50% higher than the price Nasdaq set as a reference the day before of $250.
“The price of COIN will be very volatile. We can expect it to fluctuate along with the prices of cryptocurrencies. Investors should buckle up their seatbelts and expect a wild ride.”James Angel, a finance professor at Georgetown University
Not long before going public, Coinbase gifted 100 shares to each of 1700 of the company’s employees. With COIN stock open at $381, the firm gifted more than $60 million worth of shares.
What is Coinbase?
Coinbase was founded in 2011 by Brian Armstrong. After partnering with Fred Ehrsam in 2012, the online platform where people could trade and store bitcoin was finally launched.
“It was not clear that the cryptocurrency experiment would even work. Now we talk about market share in cryptocurrency or cryptocurrency competing with fintechs and things like that. At the time, this was much more existential and was about whether the entire category would work ,and most of those early Coinbase folks were true believers that had faith that this was an incredibly new technology.”Olaf Carlson-Wee, the first hire at Coinbase, now the CEO and founder of Polychain Capital
What to expect from the public listing
While there is a growing demand to purchase digital currencies lately, Coinbase found it quite difficult to keep up with it. Coinbase insisted on doing a direct listing instead of an initial public offering and depend on Wall Street investment banks to determine the share’s price.
“The reason we’re doing a direct listing is that it’s going to get all market participants. We’re not allocating shares to just ten institutions. This is going to be a robust, deep price discovery. And we’re excited to see where that market ends up.”Coinbase CFO Alesia Haas told CoinDesk in an interview
The listing to the US stock exchange may have an indirect impact on average investors to the cryptocurrency environment.
“Hopefully, Coinbase going public and having its direct listing is going to be viewed as kind of a landmark moment for the crypto space.”Brian Armstrong, Coinbase’s chief executive, said in a CNBC interview.
Coinbase follows another company that went public on Nasdaq Nordic earlier this year, CoinShares. Read our other article and find out how their listings change!