Cryptocurrency exchange Coinbase Global (COIN) launched its direct listing on the Nasdaq Wednesday in a highly anticipated initial public offering. The Coinbase IPO rocketed as trading began for what is now the first major crypto business to trade publicly in the U.S.
The Coinbase IPO received a reference price of $250 a share late Tuesday. That gave it a market valuation of about $66 billion on a fully diluted basis. As trading got underway, Coinbase stock shot up 60% to 399, during afternoon trading on the stock market today. That pushed Coinbase’s market valuation past $100 billion.
Coinbase stock closed at 328.28, up 31.3%, for a valuation of $87.3 billion.
Coinbase is the largest U.S. cryptocurrency exchange. It lists about 50 cryptocurrencies for trading, led by Bitcoin and Ethereum.
“Today’s listing of Coinbase is the latest critical milestone in the validation of the global crypto ecosystem,” Anatoly Crachilov, chief executive of Nickel Digital Asset Management, said in a written statement. “Like the first ever internet-related IPO of Netscape in August 1995, which set the scene for a subsequent four-year bull market in internet stocks, the first-ever IPO of a major crypto company may unleash a multiyear secular inflow of capital into the digital asset sector.”
Coinbase IPO Brings Increased Validation
Bitcoin is the largest digital coin by market value, and has more than doubled in value so far this year. As a result, that helped lift the total value of the cryptocurrency market past $2 trillion. That’s a doubling in about two months amid surging institutional demand. Bitcoin accounts for about half of that $2 trillion.
Analysts expect the Coinbase IPO to give the cryptocurrency market increased validation.
“The Coinbase IPO is potentially a watershed event for the crypto industry and will be something the Street will be laser focused on to gauge investor appetite,” Wedbush analyst Dan Ives wrote in a note to clients. “Coinbase is a foundational piece of the crypto ecosystem and is a barometer for the growing mainstream adoption of Bitcoin and crypto for the coming years.”
On April 7, D.A. Davidson analyst Gil Luria, set an estimated price target on Coinbase stock of 440.
“We continue to believe Coinbase’s product experience and best-in-class compliance and regulatory controls should provide a defensible moat,” Luria wrote in a note to clients.
Bitcoin Prices Rising
Traders have lifted the price of Bitcoin higher, on signs of more mainstream and institutional adoption. In addition, more people are investing in Bitcoin after an avalanche of coronavirus stimulus shocked the cryptocurrency back to life last year.
PayPal stock fell 3%, closing at 267.21. Square stock dropped 5.4% to 258.40.
PayPal allows users to buy and sell cryptocurrency, as does Square.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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