A successful Coinbase listing may result in further Bitcoin rally with the embrace of Coinbase into traditional markets being regarded as a wider acceptance of the crypto assets.
Ahead of Coinbase listing, regulatory filings on Wednesday reveal that the company’s valuation has risen to $68 billion. This happened after private shares climbed 13 fold in the last few months.
In 2018, Coinbase was valued at about $8 billion according to PitchBook data. Since then, the largest crypto exchange in the US has come a long way to reach an implied value of $68 billion. In its updated S-1 filing, the exchange revealed that private shares were trading at an average price of $343.58 in the first quarter of 2021. This has been a significant rise from $28.83 in the last quarter of 2020. The private transactions have now seen the value of the company rise to $68 billion The company further noted an intent to sell 114.8 million shares ticker symbol (COIN) through a direct listing on Nasdaq.
The company is set to list directly as opposed to IPO eliminating the need for underwriters. Coinbase is set to be the first major direct listing on Nasdaq which has been counted as a big win for the entire crypto industry.
If successful, Coinbase crosses a major milestone. By becoming the first publicly traded crypto exchange in the US, it will be setting a precedent for other exchanges. As we reported earlier this is already evident with Kraken revealing it is considering listing next year. It will further bring confidence in the market among traditional investors who have previously been dismissive of the cryptocurrency sector.
Although the exchange has listed Bitcoin price decline as a risk factor, its 2020 performance remained positive. Despite Bitcoin struggling, it still managed to net $1.1 billion, making a profit of $322 million. In its initial filing, the company stated it has over 43 million customers in 100 countries.
Will Coinbase Valuation Be Realized
As aforementioned, private shares according to data platform PitchBook saw a 13 fold rise in just a couple of months. Will this be significant to market shares? Private shares according to experts are not a primary factor in setting market share prices and value. However, it allows for a rough estimate of the ranges.
In recent months, debut companies and especially tech companies have been surpassing expectations. Coinbase being the leading US exchange in the US will be a highly anticipated one with even the most skeptical investors making an indirect investment in the Bitcoin rally by maybe investing in Coinbase shares.
Its listing is further perfectly timed with an impressive Bitcoin performance that has seen it acquire massive admiration from institutions and retailers. This is coupled with a market frenzy in stocks which some experts believe is an ongoing bubble.
A successful listing is likely to see Bitcoin further rally with the embrace of Coinbase into traditional markets being regarded as a wider acceptance of the crypto market.