₿ What Today’s Coinbase IPO Means for Bitcoin ₿
$63,268.10 — that’s how much one bitcoin will run you as of this writing.
It’s an incredible number. Particularly when you consider that Bitcoin was trading at around $6,700 this time last year.
But there’s a number we’re about to see today that might be even more incredible: the price that Coinbase Global Inc. (NASDAQ: COIN) starts trading at when shares debut later today.
Coinbase is the largest cryptocurrency exchange in the U.S. by volume, with more than 56 million verified users who mainly trade Bitcoin and Ethereum, and its launch as a publicly traded stock has been hotly awaited by the industry.
Coinbase isn’t launching via a typical IPO.
Instead, it’s going public via a direct listing, a deal that cuts out the Wall Street bankers who typically act as middlemen on the transaction.
Nasdaq, the stock exchange Coinbase will start trading on today, put a $250 “reference price” on shares. But it’s not clear what price they’ll start changing hands at. Odds are it’ll be a lot higher if current private shareholders like Digital Currency Group founder Barry Silbert are any indication:
As of this writing, I’m hearing that shares are more likely to trade around $375 per share. But that number’s been climbing all morning.
(COIN is actually expected to begin trading later this afternoon, but we don’t yet know exactly when as I write shortly after noon Wednesday…)
The Coinbase launch is a big deal because it bridges the gap between crypto as a fringe investment and a mainstream business. Crypto skeptics can’t argue with the $1.8 billion in U.S. dollar revenue Coinbase booked last quarter.
In a lot of ways, Bitcoin’s surge over this past year has justified a massive valuation for Coinbase. And a successful debut on the Nasdaq for Coinbase today also helps justify much higher Bitcoin prices.
Ultimately, it’s that more universal acceptance that paves the way for long-term sustained higher Bitcoin prices.
We’ve already seen big fintech firms like PayPal and Square make big bets on Bitcoin and other cryptos.
And we’ve seen companies like Tesla take big stakes in the digital currency in part to facilitate accepting payments in Bitcoin. If other major players follow suit, expect to see the Bitcoin rally continue.
It makes sense to keep a close eye on how Coinbase starts trading today. A strong kickoff to trading likely suggests more pent-up demand for cryptocurrencies, chiefly Bitcoin.
Bitcoin’s rally has been remarkable this year, but I think there’s a strong case to be made for a lot more gas left in the tank…
Jonas Elmerraji, CMT