The rise of digital currencies has recently brought strong sales to cryptocurrency trading platform Coinbase. With its IPO, it could be worth more than any other stock trader in the world.
Driven by the rise in the price of cryptocurrencies, the Coinbase market is heading this Wednesday towards Wall Street. Coinbase is the largest digital currency trading platform in the United States, and one of the great hopes of the sector. With this, the world’s first cryptocurrency exchange lands on the New York stock market. The shares are listed on the Nasdaq technology exchange at a reference price of $ 250 per share.
The omens for its IPO cannot be better. The nine-year-old platform gained more than 13 million customers in the first quarter of this year alone. Due to the relentless demand for Bitcoin, the oldest of all cryptocurrencies, the company’s sales have recently exploded dramatically. Coinbase brought in $ 1.8 billion in the first three months of this year, nine times more than in the same quarter last year.
With a potential valuation of $ 100 billion, Coinbase could even achieve the most successful IPO of the year on Wednesday. 56 million users in more than 100 countries are already using the service of the trading platform founded in 2012. This makes it the third largest market in the world after Binance and Huobi Global, two Chinese cryptocurrency exchanges.
“They came to stay”
The listing should be a milestone on the road to greater adoption of cryptocurrencies, says Charles Hwang, a crypto expert and blockchain professor at Baruch College in New York. So far, the sector has struggled to win the trust of major investors, regulators, and the general public. “Many people argue that you cannot put your own value on cryptocurrencies. But this IPO could show the markets that the cryptocurrency industry is here to stay,” Hwang says.
As early as January, Coinbase had filed a so-called direct placement with the United States Securities and Exchange Commission (SEC). In this, unlike a traditional IPO, the papers are listed on the stock exchange without a prior pricing process.
Investors who acquire a stake in Coinbase may ultimately benefit indirectly from the cryptocurrency boom. “Those who feel more comfortable investing in stocks and putting their money in a company with cash flow, a board of directors and a traditional infrastructure will see an opportunity to invest in Coinbase,” said Chris McAlary, director of CoinCloud, a provider of cryptocurrency ATMs, in the online magazine NerdWallet. In this way, according to McAlary, investors can avoid the price volatility that is so common in the industry.
Increased acceptance of digital currencies
The current boom in cryptocurrencies is due to the increasing acceptance of banks and companies. In addition to the payment service provider PayPal, credit card companies like Visa and automakers like Tesla now allow you to pay with digital currencies.
However, the cautious approach to the new world of cryptocurrencies is only the beginning, believes Coinbase founder Brian Armstrong. Within a decade, he says, the number of people who will use the blockchain system will rise from 50 million to one billion. “When I launched Coinbase, most people thought blockchain was crazy,” Armstrong, 38, told Forbes magazine. “Now governments and the old guard of investors are investing in this technology,” he said.