On April 14, 2021, Coinbase started trading on Nasdaq at an approximate valuation of $100 billion, and many experts saw it as a watershed event in the history of the global cryptocurrency ecosystem. The milestone event is likely to enable crypto bulls to advocate more affirmatively for the proliferation of crypto assets.
The direct listing of Coinbase can be a significant sentiment-driving signal for the global digital asset sector. The effects can already be seen, as the listing has sparked a rally in cryptocurrency prices worldwide. Bitcoin traded over $60,000 from April 13 to April 16 as the news of Coinbase listing stirred a new crypto hype. Ethereum’s price started rallying on April 12 and made an all-time high of $2,516.11 on April 15.
Coinbase listing might mark the new era of digital assets. But keeping the mercurial nature of crypto in mind, the outcomes could be uncertain.
Today, let’s delve into Coinbase IPO, why it is a big deal for the crypto industry, and how it’ll reshape the industry’s future.
Coinbase: A Quick Overview
Coinbase is one of the largest crypto asset exchange platforms in the world. Founded in 2012 by Brian Armstrong, the platform is operated in about a hundred countries and is used by 43 million verified users and 7,000 institutions.
Coinbase has successfully managed to remain solid collateral in an ecosystem full of shocks and changes. Over the years, the company has adapted to the ever-evolving crypto sector. For example, it recently started providing insurance to users to protect them from platform theft.
Coinbase has established itself as a platform that dominates the crypto scene and lends legitimacy to the listed assets. Hence, the hype of Coinbase IPO was something everyone expected.
Why Is Coinbase IPO Important?
Now, why is Coinbase IPO considered a landmark event in crypto history? As discussed, Coinbase is the largest cryptocurrency in the world. Therefore, its public listing is expected to enhance the credibility of crypto trading and draw the attention of governments worldwide. A publicly listed company is subject to disclosures and regulations, which increases its credibility.
Cryptocurrency trading has received pushback from countries worldwide, and Coinbase IPO is likely to ease things for crypto investors, traders, and enthusiasts.
Coinbase IPO and the Future of Crypto
Coinbase started at $250, as assigned by Nasdaq. It went as high as $429 and ended up closing at $328 on an opening day. It closed with a valuation of around $62 billion after nearly touching $100 billion.
When a completely virtual cryptocurrency company with no headquarters reaches such a high valuation, it does more than promoting the cryptocurrency phenomenon. It impacts the real economy.
Over the last year, the increase in day trading of cryptocurrencies has surged the value of Bitcoin, Ether, and other tokens. It inspired Tesla to invest $1.5 billion and payments company Square to invest $170 million in Bitcoin.
The stock trading platform Robinhood announced that 9.5 million of its users had traded and invested in cryptocurrency in the first three months of 2021. This number was more than fivefold higher than the previous three months.
PayPal, the leading online payments company, introduced crypto trading and shopping features for its users in the United States.
With all these events in hindsight, the time was right for Coinbase to get listed as a public company on Nasdaq. Even in this era of the crypto boom, many governments and countries haven’t allowed cryptocurrencies. The main concern is that the government and financial institutions can’t regulate them, which invites criminals and people interested in money laundering and tax evasion.
Coinbase’s listing on Nasdaq has demolished many of those concerns. A publicly listed company is regulated by the government and has to follow a set of regulations and policies. As a result, this event has lent legitimacy to the crypto industry and paved the way for worldwide acceptance of digital assets.
While Coinbase IPO has elated the crypto industry, some crypto enthusiasts are disappointed. Many see this event as a move away from the fundamental promise of cryptocurrencies – providing the public with full control of their money. Though the Nasdaq listing of Coinbase brings legitimacy to the crypto sector, it also brings crypto traders and investors under the radar of regulations. For many, this neutralizes the sole purpose of cryptocurrencies and blockchain systems.
What Does This Mean for Crypto Investors?
Seasoned crypto traders and investors already caught the crypto rally that occurred around April 14. If you missed it, there’s nothing to worry about, as the market will continue to provide opportunities to both short-term and long-term investors.
If you want to buy Coinbase stocks, you can do so from any stock trading platform that lists Nasdaq stocks. Investors outside the US can also buy Coinbase stocks using Binance Exchange and other platforms.
When is the best time to buy Coinbase stocks? If you want to invest in Coinbase, consider these two points:
- Coinbase is an investment for the long-term. While the current market volatility may tempt intraday and swing traders, the uncertainty of the crypto industry can make it difficult to catch the trend.
- Investors should sit on the sidelines for a few weeks and let the volatility in the stock settle down. Once the stock builds support and resistance levels, you can start taking medium-long term positions.
Wrapping Up: A New Wave of Crypto?
Coinbase IPO has paved the way for a cryptocurrency-based economy. It’s one of many ways to legitimize cryptocurrencies. The listing has already surged the cryptocurrency market as major cryptocurrencies like Bitcoin and Ether saw significant rallies.
Nevertheless, for many crypto enthusiasts, it’s disruption of money and deviation from the sole promise bitcoin and cryptocurrencies stood for. Another reason why Coinbase’s IPO is a milestone event is that the crypto industry is currently in a state of turbulence. From here, cryptocurrency could receive worldwide acceptance, or its viability could shrink even further.
How do you think Coinbase’s IPO will affect the global cryptocurrency sector?