The much-discussed and highly-anticipated event has finally begun: US-based major crypto exchange Coinbase went public on the Nasdaq stock exchange via a direct public offering (DPO) of its shares under the symbol ‘COIN’.
It debuted at USD 381, reaching almost USD 430 and surpassing USD 100bn valuation, before dropping to USD 310 and ending its first day at USD 328, per Nasdaq data.
Bitcoin (BTC), ethereum (ETH), and major altcoins corrected lower as COIN dropped. At 20:02 UTC, BTC trades at USD 61,903 and is down by almost 2% in a day, while ETH is still up by almost 2%, trading at USD 2,341.
It took a few hours until the price was available in public. Per Jamie McGurk, a Partner at venture capital firm Andreessen Horowitz, a shareholder of Coinbase, an auction starts early in the morning on the first day of trading, first indicating size of demand, and then at what price as supply and demand starts to build. “Buyers and sellers will adjust their orders for several hours as the market begins to hone in on the equilibrium price,” McGurk said.
The listing itself, per many industry insiders, is expected to be largely beneficial for the exchange and the crypto industry in its entirety.
Volatility, however, is expected in the first weeks of trading. Lior Messika, Founder and Managing Partner of research-focused EU VC Fund Eden Block, said that the direct listing could pose a challenge to the wider crypto industry and market. Though the event is a game-changer that “symbolizes a brave new era for the blockchain industry, […] the inherent volatility of digital assets and overall infancy of the space might be reflected in the company’s share price over time.”
Meanwhile, over 1,700 Coinbase employees were handed 100 shares worth thousands of dollars ahead of the listing, some of which arguably might be used to invest in bitcoin and altcoins.
However, some analysts disagree. Despite bitcoin (BTC) and ethereum (ETH), as the two largest cryptoassets in the world by market capitalization, seeing their new all-time highs on the very day of the DPO, Vijay Boyapati, the author of ‘The Bullish Case for Bitcoin’ and Senior Software Engineer at Peach, had previously said that Coinbase’s listing would not actually push BTC’s price higher, and that the employees may not be investing in crypto.
Furthermore, many have wondered about sustainability. The exchange’s fate is tied to the performance and uptake of bitcoin and other cryptoassets, said Andrew Urquhart, Associate Professor of Finance at ICMA Centre, University of Reading. “But if you are interested in investing in cryptoassets, you are probably still better off investing in the digital coins themselves as their performance depends only on the level of demand for them.”
That said, the insiders remain bullish. Standard Hashrate Group CEO, Alex Zhao, concluded that “the Coinbase IPO is a testament to the maturation of Bitcoin and cryptocurrency. With Bitcoin now as mainstream as ever, we see the industry continuing to grow into the foreseeable future.”
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Reactions:
The @coinbase message:
— Kristen Stone (@keighstone)
Assume that COIN up –> BTC up.
— SBF (@SBF_Alameda)
The long term test for Coinbase will be if they manage to grow these metrics continuously & don’t cannibalize new u… https://t.co/ZU0oavuGvy
— Ma/ya Zehavi (@mayazi)
I remember working in finance when Facebook IPO’d. Everyone in nearby desks thinking buying IPO was a sure fire way… https://t.co/Za8bpcBFWY
— Simon Taylor (@sytaylor)
Faith, trust, and crypto #♂️ dust?
— Julia Chatterley (@jchatterleyCNN)
$COIN IPO today. historic day.
— Feeney Factor (@TheFeeneyFactor)
@nic__carter This monetary base comparison drives me nuts. Gonna write about it tomorrow.
— Joe Weisenthal (@TheStalwart)
2/18
— Adam Cochran (@AdamScochran)
$COIN IPO:
— Q-Cap (@qcapital2020)
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Learn more:
– Considering Coinbase’s COIN? You Might Be Better Buying Bitcoin Instead
– Coinbase Goes For Direct Testing Of Crypto Narratives Today
– Coinbase Employees Get Extra Millions That Might Be Spent on BTC and Alts
– Coinbase Goes Public This Week – What To Expect?
– Coinbase Listing Won’t Help Bitcoin Price – Analyst
– BTC Slips As Coinbase Sees 15% User Growth At Best, Focuses on Altcoins
– The Dark Side Of Coinbase Listing
– Bitcoin, Ethereum Hit New ATHs One Day Before Coinbase Listing
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(Updated at 14:04 UTC with a new video and reactions. Updated at 14:58 UTC with a video. Updated at 15:12 UTC with a Bloomberg report. Updated at 16:26 UTC with more reactions. Updated at 17:37 UTC with the latest price data. Updated at 18:19 UTC with the latest market data. Updated at 20:04 UTC with the latest market data.)