Not many knew about Coinbase a year ago. Today it is one of the great protagonists of the world economic panorama. Thanks to a historic IPO with a valuation that has finally shot up to almost 100 billion dollars.
Conversely, in 2018, the company was valued at $8,000 million. Its IPO could not have occurred at a better time. Bitcoin is at all-time highs and carries contagious optimism for some cryptocurrencies that have been conquering the institutional market for months. Bitcoin managed to exceed $64,000 in the last few hours.
Coinbase has debuted at $381 per share. Over the last few hours, the stock has risen to $429, and at the time of writing, it is around $320.
Coinbase’s business is multi-legged. Its platform allows investors to buy and sell cryptocurrencies, whether it is $10 or $10 million. It offers custody services to those who accumulate significant amounts in this type of asset. And it charges creators of new currencies to include them on its list. Among its most famous clients is the electric car company Tesla, which acquired 1.5 billion dollars in bitcoins months ago. Some experts believe that their international diversification and their licenses to operate make them well-positioned. With the arrival of institutional investors, investment funds, and companies, they take advantage of the new wave.
Apparent Optimism, but Arguments of Caution for Investors
Experts believe that Coinbase’s IPO is the ultimate test of the maturity of cryptocurrencies.
We can’t say that there are no doubts about the future of cryptocurrencies in general and Coinbase in particular. Regulation in this segment is still somewhat diffuse and depends on a volatile market such as cryptocurrencies.
For experts such as Larry Cermak, bitcoin’s correlation will be very high when the stock stabilizes after it goes public. When the price of bitcoin falls, the Coinbase stock price will also do so.
Also, shortly, Coinbase’s role might not be what it is now. Now, this exchange is a clear reference in cryptocurrency transactions. However, that could change.
This centralized model with Coinbase and other exchanges as mandatory intermediaries is likely to change in the future.
The world of decentralized finance is starting to gain popularity among many investors. They see how exchanges such as Uniswap or Sushiswap may come up with an alternative that will remove players like Coinbase from the equation in the future.