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.
As a reminder, after much speculation since the end of 2020, the exchange Coinbase filed to go public via USD 1bn direct listing on the Nasdaq Global Select Market in late February this year.
Antoni Trenchev, co-founder and managing partner of regulated financial institution for digital assets Nexo, said in an emailed commentary that,
“With its formidable institutional custody, Coinbase is uniquely positioned to legitimize an entire industry and give an unmistakable signal to the few remaining traditional players that haven’t yet dipped their toes in crypto that we’re here to stay, we mean business, and we mean it compliantly.”
As a reminder, unlike the traditional initial public offering (IPO), in a direct listing, the company sells shares directly to the public without getting help from intermediaries. This is the route some major companies like Spotify and Palantir have chosen to take in recent years. Nearly 115m Coinbase shares are on the market now.
“I wanted there to be just a true market on day one that set the price,” says @Brian_Armstrong on $COIN going publi… https://t.co/WzRw6AL6E6
— Squawk Box (@SquawkCNBC)
While the projected valuation stood upwards of USD 100bn in the days leading to the DPO, there were quite a few of those who expressed doubt that the math behind this number is possible.
But Coinbase’s valuation surpassing that of historic financial institutions like JPMorgan coinciding with crypto’s market capitalization surpassing USD 2trn provides the space with “much-needed stability that will reassure retail investors,” commented Ganesh Swami, co-founder and CEO of the provider of blockchain data Covalent.
Just prior to the listing, late on Tuesday, Nasdaq said the Coinbase was given a reference price of USD 250 a share, which valued it at around USD 65.3bn. This, however, didn’t indicate where the stock would open.
In early April, the exchange announced its Q1 2021 results, spurring a number of bullish narratives with its USD 1.8bn in revenue in the first quarter of 2021, compared to USD 1.3bn for the entire 2020.