Major cryptocurrency Bitcoin surged to a fresh record high of more than $64,000 last Tuesday as investors awaited the Coinbase debut. The cryptocurrency exchange is set to begin trading at the stock market Wednesday, and many investors are lining up.
Coinbase Debut Today
The price of bitcoin climbed to more than $64,729.5 early Wednesday morning. Ether, the next most valuable crypto, also set a new record. It spiked to $2,371 as of Wednesday morning. Coinbase will go public on Wednesday through a direct listing. This places an initial estimated value of $100 billion.
This amount is bigger than the values of major trading venue operators, including the owner of the New York Stock Exchange. Crypto investors hailing the public debut as a major milestone. Prior to the Coinbase debut, cryptocurrency endured years of skepticism from Wall Street and regulators.
Marcus Swanepoel, CEO of London-based cryptocurrency platform Luno shares the excitement. “This is really good and really important for the industry. It’s going to increase the trust and transparency in our industry.
There’s still a bit of distrust in the industry and I think having a company of that size be public is going to help a lot of people realize that this is not just an asset class to take seriously but also a business to take seriously,” he said.
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Coinbase Reports Record Revenues
Founded in 2012, Coinbase remains the largest cryptocurrency exchange in the United States. Thanks to the furious climb of Bitcoin and other cryptos, it oversaw surging revenues in 2020 and 2021. The exchange estimates its first-quarter 2021 revenues at $1.8 billion, a nine-fold increase from the same time last year. Profits grew between $730 million and $800 million.
The continued mainstream acceptance of Bitcoin helped. The cryptocurrency more than doubled in price since last year as more and more investors jumped in. EV market leader Tesla recently invested $1.5 billion in bitcoin.
In addition, it announced it will start accepting payments in bitcoin. Meanwhile, major Wall Street firms like Goldman Sachs and Morgan Stanley recently started offering clients bitcoin investments.
Investors Eagerly Await Coinbase Debut
Coinbase is poised to command a very high valuation once the exchange opens Wednesday. As long as its cryptocurrencies continue to shoot up in price, the crypto exchange’s value will also fly along with them. With the bitcoin now hovering at $64,000 and Ether at $2,300, the initial valuation of $100 billion might even go higher.
In fact, this will make Coinbase one of the 85 most valuable US companies immediately as the market opens.
However, basing Coinbase’s value on its crypto is undervaluing the exchange. Matthew Le Merle, the managing partner of Fifth Era and Blockchain Coinvestors, offers a perspective.
He said that tying Coinbase’s value to bitcoin is similar to valuing early Amazon based on book sales. Or, it’s like placing a multiple on Airbnb five years ago by looking at the rental booking rate.
“You don’t think about bitcoin volatility, trading fees, and revenue. You have to start with — what’s the profit pool of the world’s digital monies and assets? In that context, this is trillions and trillions of dollars that’s going to be shifting hands,” LaMerle said.
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Watch the World Crypto Network video reporting that Crypto breaks $63,000 and Ether posts a new record as well on the even of Coinbase debut:
With the Coinbase debut happening, have you changed your mind about bitcoin? Are you now seriously considering investing in cryptocurrency or in crypto exchanges?
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