Currency exchange Coinbase Global (COIN) offered its direct listing on the Nasdaq on Wednesday in a much anticipated initial public offering. Coinbase’s stock market launch began when trading began for what is now the first major crypto company to trade publicly in the US
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The Coinbase exchange received a reference price of $ 250 per share late on Tuesday. This gave a market valuation of about $ 66 billion on a fully diluted basis. As the trade progressed, Coinbase shares rose 60% to 399 during the afternoon trading on the stock market. That pushed Coinbase’s valuation past $ 100 billion.
Coinbase shares closed at 328.28, up 31.3%, for a valuation of $ 87.3 billion.
Coinbase is the largest US currency exchange. It contains about 50 cryptocurrencies for trading, led by Bitcoin and Ethereum.
“Today’s listing of Coinbase is the latest critical milestone in the validation of the global crypto ecosystem,” said Anatoly Crachilov, CEO of Nickel Digital Asset Management, in a written statement. ‘Like the first internet-related IPO of Netscape in August 1995, which set the stage for a subsequent four-year bull market in internet stocks, the first IPO of a large crypto company could see a multi-year secular inflow of capital into the digital asset sector. ‘
Coinbase IPO brings increased validation
Bitcoin is the largest digital currency by market value and has more than doubled so far this year. As a result, it has helped increase the total value of the cryptocurrency market to more than $ 20 billion. It doubles in about two months amid rising institutional demand. Bitcoin accounts for about half of the $ 2 billion.
Analysts expect that Coinbase’s stock market will increase the cryptocurrency market.
“The invitation from Coinbase is potentially a watershed event for the crypto industry and will be something the Street will focus laser-focused on measuring investors’ appetite,” Wedbush analyst Dan Ives wrote in a note to clients. “Coinbase is a fundamental component of the crypto ecosystem and is a barometer of the growing widespread use of Bitcoin and crypto for years to come.”
DA Davidson analyst Gil Luria set an estimated price target on Coinbase share of 440 on April 7.
“We continue to believe that Coinbase’s product experience and best practices and regulatory controls should provide a defensible channel,” Luria wrote in a note to customers.
Bitcoin prices rise
Traders raised the price of Bitcoin higher, on signs of more general and institutional adoption. In addition, more people are investing in Bitcoin after an avalanche of coronavirus stimuli revived the cryptocurrency last year.
Morgan Stanley (MS) now allows some of its richest clients to add Bitcoin to their portfolios. Also, Tesla (TSLA) now accepts Bitcoin as payment for cars.
Mastercard (MA) and PayPal (PYPL) also accepts Bitcoin. In addition, in October, digital payments company Square (SQ) bought $ 50 million worth of bitcoin.
PayPal share fell 3% to close at 267.21. The square stock fell by 5.4% to 258.40.
PayPal allows users to buy and sell cryptocurrencies, just like Square.
Follow Brian Deagon on Twitter @IBD_BDeagon for more information on technology stocks, analytics and financial markets.
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