Coinbase Global Inc., the largest US cryptocurrency exchange, has made its debut in the stock market. The stock under the ticker symbol ‘Coin’ opened for trading at $381 once it got listed on Nasdaq. At this price, the cryptocurrency exchange is valued at close to $100 billion. Ahead of its listing, the reference price set by Nasdaq was $250 per share, which served as a benchmark and not the actual buy price for investors.
Coinbase was trading at around $414 on April 14, 2021, in the initial minutes of the trade. Coinbase’s shares were trading privately in the first quarter of this year at a volume-weighted average price of about $343.58.
The Coinbase listing has happened through the Direct Listing route and not through the IPO route. An IPO is the most common way that companies choose to join the public markets in order to raise capital while in Direct Floor listings, companies are allowed to list their shares directly and begin trading publicly on the exchange.
Coinbase is a cryptocurrency exchange that helps one buy and ‘hodl’ cryptocurrencies such as Bitcoin, Ethereum, Litecoin among others. ‘Hodl’ is a term used in the crypto community for holding a crypto asset through ups and downs, rather than selling it.
On April 14, 2021, ahead of Coinbase listing on Nasdaq, Bitcoin – the crypto with the highest market capitalisation – was trading at around $63000.
Founded by Brian Armstrong and Fred Ersham in 2012, Coinbase is a decentralized company that powers the crypto economy. Coinbase’s mission is to create an open financial system for the world by leveraging the power of digital assets built using blockchain technology. The platform now has over 43 million users worldwide and has transacted more than $456 billion to date, according to the company’s latest filing with the SEC.
The platform enables approximately 43 million retail users, 7,000 institutions, and 115,000 ecosystem partners in over 100 countries to participate in the crypto economy. As of December 31, 2020, the total value of trade was over $456 billion on the platform since its inception and had stored over $90 billion worth of assets across their platform. From inception through December 31, 2020, the company had generated over $3.4 billion in total revenue, largely from transaction fees that they earned from volume-based trades on the platform by retail users and institutions. In 2020, Coinbase had generated more than $1.3 billion in revenue, more than double the $534 million earned in 2019.
The cryptocurrency market capitalisation is estimated to be around $2 trillion and investing in the shares of Coinbase gives an opportunity to investors to ride the crypto wave. While the recognition of cryptos as an asset class may still be in a disputed territory and the jury is still out on whether the cryptos will come into the mainstream or remain a speculative asset, investors get an opportunity to be a part of the rising crypto economy.
Indian investors looking to invest in the shares of Coinbase may consider opening an international trading account with any foreign brokerage firm and start investing. Opening a foreign trading account is possible after completing KYC and other bank formalities in a few days’ time and investing in top US stocks such as Facebook, Google, Tesla and others can be done from one’s home or office in India.