Coinbase became the first major cryptocurrency company to publicly trade on the Nasdaq on Wednesday. Hide SOPA images / SOPA images / LightRocket using Gett labeling
SOPA Images / SOPA Images / LightRocket via Gett
SOPA Images / SOPA Images / LightRocket via Gett
Coinbase, a San Francisco startup that enables people to buy and sell digital currency, was the first major cryptocurrency company to go public when it made its public debut on Wednesday.
Trading started at around $ 381 per share, pushing the company’s valuation to nearly $ 100 billion. That was about what Facebook was worth when it was its IPO in 2012.
Coinbase’s listing on the Nasdaq under the ticker symbol “COIN” was heralded by enthusiasts as a turning point for once-obscure digital currencies.
“Today was a milestone” said Cryptocurrency investor Ian Lee. “Crypto is the future of finance.”
Bradley Tusk, a political advisor and venture capitalist who backed Coinbase financially, said the company’s public offer shows that more Wall Street banks and other traditional investors are embracing the idea of cryptocurrency.
“People have had doubts about crypto for a long time. And I don’t blame them,” Tusk said. “But what has become of it, whether by design or not, is an asset class – something that people want to be in when they want a really balanced portfolio.”
But Tusk admits that cryptocurrencies are notoriously volatile.
“Is cryptocurrency ever used for everyday things? Not safe,” said Tusk. “But another way of thinking about it is, are we going to get to a point where all payments are digital and we don’t use cash or credit cards? Absolutely.”
However, this point can be a long way off.
Investment firm Wedbush Securities forecast on Wednesday that less than 5% of public companies will invest in cryptocurrency over the next 18 months.
Coinbase’s Mission: Building the “Crypto Economy”
In 2012, Brian Armstrong retired from Airbnb software engineer has been Frustrated with the “high fees” and “opaque” nature of overseas digital transactions, he and former Goldman Sachs dealer Fred Ehrsam founded Coinbase, where people can easily buy and sell cryptocurrencies without going through a bank.
Like many startups in the crypto world, Coinbase has positioned itself with the potential to disrupt the global financial system.
“The way we invest, spend, save and generally manage our money today is cumbersome, inaccessible, expensive and regionally isolated,” wrote Coinbase a submission with the Securities and Exchange Commission. “We are building the crypto-economy – a fairer, more accessible, more efficient and more transparent financial system for the Internet age.”
At the time of filing in December 2020, Coinbase notified regulators that 7,000 retail and financial institutions and 43 million users were active on the platform.
38-year-old Armstrong is now considered one of the richest people in the world, with a 21% stake in the company valued at around US $ 13 billion.
“There’s a saying that the best way to predict the future is to create it. Hopefully we’ve helped make the future happen a little earlier than it would otherwise in the crypto room,” said Armstrong tweeted On Wednesday.
Researchers have long pointed on the attractiveness of cryptocurrency for fraudsters and other illegal activities like money laundering, as the largely unregulated markets make it easy to hide transitions. And have lawmakers in Washington worked Develop rules and regulations to take government control of the industry.
With laws slow to adapt, interest in crypto markets, especially the pandemic, is booming.
For example, at the end of 2020, a single bitcoin cost around $ 28,000. The price has more than doubled since then. As of Wednesday, a Bitcoin will cost around $ 62,000.
Have other cryptocurrencies like ether, which is bought and sold on the Ethereum system also met new record highs.
The hype about non-fungible tokens helped you, right? NFTs, the digital collectibles that make staggering sums of money for essentially a sequence of computer code that confirms that a buyer has a unique version of something that exists exclusively on the internet.
For venture capitalist Tusk, a broader topic emerges from the foam around crypto-related spending during the pandemic.
“People have less trust in the government, the media and Wall Street than ever before,” Tusk said, adding that many are now placing trust in the decentralized system that supports cryptocurrency instead.
But, he said, there’s a less haughty component of that moment that creates some crypto madness: “Everyone was at home and bored playing around with their computers, which didn’t hurt.”
Whether this enthusiasm will continue when the world opens up and people are less attached to their devices is controversial.
Tusk said he invested in Coinbase because it makes money on crypto transactions on both sides, but he doesn’t feel comfortable buying cryptocurrency himself.
“I don’t have a good read on whether Bitcoin will go up or down,” he said. “So I don’t trade the currency at all.”