Cryptocurrency Prices at All-Time High
Recently, Coinbase Global $COIN went public via direct listing, issuing stock at an ideal moment when the value of crypto has doubled in just two months, Bitcoin is booming, and institutional investors are scrambling to get in on the action. And there’s no secret about it after making its big debut with a market capitalization of $100 billion or 80 times its latest annual revenue. A big red flag because the average market cap rate of all IPO’s is around $1.5 billion. The Coinbase Direct Listing is important for a variety of reasons, let’s look at them:
Cryptocurrency is the Future of Financial Products and Services
This is all about the possibilities, the future. Coinbase not only supplies to retail investors, but also to institutions, brokering transactions of millions in cryptocurrency. It’s the real kahuna with large financial and competitive moats to keep its fierce rivals out. The list of advantages includes the ability to use the tokens bought on the exchange within the cryptocurrency network, earn interest, and the freedom to move it off the exchange. Allowing citizens to be custodians of their own investments is revolutionary. This makes the company a hybrid between a traditional custodial brokerage, ie Charles Schwab, and an entrepreneurial exchange, like NASDAQ.
Coinbase is a US based company, they’re scrutinized at every decision. They have raised capital the old-fashioned way. While its competitors, ie Bitfinex, Poloniex, Binance, are facing less regulation and little to no market structure. Shady origins and limited operational oversight can be a disaster. As history has demonstrated, not all exchanges are created equal. The most notable failure was the fall of Mt. Gox, a Tokyo based exchange that at one time handled 70% Bitcoin trading volume until it suddenly lost 850,000 of it’s client’s Bitcoin… oops.
Coinbase is a Regulated Cryptocurrency Exchange with a Unicorn Evaluation
Coinbase has been building momentum for some time, with volumes increasing year over year. It seems like there is something unique to the trajectory of this unicorn. Aside from WeWork, Coinbase, has steadily attracted institutional investors, such as Cathy Woods, who has invested $580 million of ARK’s funds into it. Also making sure that work transfers to the clients i.e. coinbase customers who may have griped about the paperwork when joining in the past but now are eager as ever to check those regulatory boxes themselves. And this is becoming more clear because Coinbase is becoming one of the most trusted platforms in the world. On top of into a market with zero barriers to entry (anyone can create a wallet, crypto token, or marketplace) but we’ve already talked about what can happen even when the trust is high that’s why its more important than ever to have a marketplace backed by the SEC via the New York Stock Exchange.
NYSE Listing Increases Reputation of Cryptocurrency Exchanges
Coinbase now has a piece of real estate on the largest stock exchange in the world and the largest exposured to interested investors. As for brokerages even Robinhood can’t touch Coinbase, none of the crypto bought there can be used in the crypto ecosystem nor can it be transferred off its platform. The only completion that comes close is Gemini, founded by the WInklevoss Twins. Regulation and a functional ecosystem are the keys to Coinbase’s success and your success as a crypto holder on the frontier of a new global economy.