By Leonard Robinson
In a major development for the digital currency market, Coinbase, the popular cryptocurrency exchange, made its NASDAQ debut on April 14.
According to CNBC, shares for Coinbase opened at $381 per share setting the initial market cap at $99.6 billion on a fully diluted basis. Quickly, the shares rose to $429 pushing the market cap up to $429, valuing the company at $122 billion, before later reaching its low of $310.
In an effort to avoid the traditional IPO process, the company listed its stock directly providing an opportunity for employees and current shareholders to sell shares instantly at market price. Doing so put the company among the likes of others in the technology sector, such as Spotify, Slack, and Robolox, who have made the process nearly standardized.
Since its launch in 2012, Coinbase has simplified purchasing and managing cryptocurrencies to become the de-facto currency exchange for Bitcoin and other cryptocurrencies. As of today, the company has 56 million users, a significant jump from 43 million at the end of 2020.
In the company’s last private financing round in 2018, investors valued the company at $8 billion. On April 6, upon releasing its first quarter earnings, Coinbase saw growth nine-fold from the prior year with an estimated $1.8 billion in revenue.
“We expect meaningful growth in 2021 driven by transaction and custody revenue given the increased institutional interest in the crypto asset class,” Coinbase said in a press release.
In the past six months, numerous technology companies have also gone public such as Snowflake, Palantir, DoorDash, and Airbnb with market caps ranging from $45 billion to $106 billion.
Some have speculated that Coinbase is a once-in-a-lifetime investment opportunity that is growing but remains in the early stages. Of these, the most notable has been cryptocurrency investor Ron Conway, who invested early in Coinbase, Airbnb, Facebook, and Google.
“I absolutely believe that Coinbase is the Google for the crypto economy and opens this huge opportunity to consumers,” Conway said.
Going forward, the biggest hurdle for the company’s CEO, Brian Armstrong, seems to be balancing the company’s relationship with lawmakers and regulators in Washington.
Coinbase has been present in Washington, DC for roughly a decade and, on April 6, joined their efforts with Square, crypto-investor Paradigm, and Fidelity to make a positive impression on lawmakers and regulators. The board of the organization will include representatives from each of the four companies.
Armstrong, speaking to CNBC, said regulation is just as much of a concern as cybersecurity. “And especially now that Coinbase is a public company, we’re gonna increasingly be having scrutiny about what we’re doing and people want to understand the implications of it,” said Armstrong.
He added, “We’re very excited and happy to play by the rules. And basically, we just ask that, hey, we want to be treated on those level playing field with traditional financial services at the very least and not have any kind of punishment for being in the crypto space.”
