Analysts say Coinbase listing represents a ‘watershed’ moment for crypto
Coinbase, the leading US cryptocurrency exchange, will soon become a publicly traded company when its COIN shares go public on the 14th. April on the Nasdaq exchange.
Overall, stock market sentiment has been overwhelmingly positive in both crypto and traditional financial markets. As the listing date approaches, analysts have varying opinions on the potential impact of the listing on bitcoin and altcoin prices.
Coinbase rally, crypto top?
As previously reported by Cointelegraph, Coinbase is not technically engaged in an initial public offering (IPO).
Instead, the listing takes place directly on Nasdaq, thus avoiding the need to use investment banks, which is often costly for companies.
Despite the lack of investment bank involvement in Coinbase’s listing process, COIN has generated a lot of excitement.
During an appearance on CNBC Squawk Boxing on the 12th. April. Jim Cramer said:
You should buy Coinbase when this deal comes, even if it is a $100 deal, it is common knowledge that there are many companies that are going to switch. MicroStrategy has always been a leader, so others would be happy to follow.
You’ll have to buy $COIN if this deal closes, says @JimCramer. This is a $2T market, maybe $3T. #btc #bitcoin pic.twitter.com/ItLMx1tbIl.
– Squawk Boxing (@SquawkCNBC) April 12, 2021
There are several reasons why investors in the traditional financial market are optimistic about COIN.
The most notable are two key factors: entering the cryptocurrency market without owning one and Coinbase’s lucrative business model.
According to Ben Lilly, co-founder of Jarvis Labs:
Coinbase has changed the game by legitimizing some of the valuations we see in the cryptocurrency space, especially since DEX has only a tiny fraction of the number of employees and guards that Coinbase or ICE has. Crypto is an asset with incredible volume and diversity that can continue to grow. The currency base shows how lucrative the impact on this market can be. Moreover, I expect a wave of DDs and VCs, with private investors asking their fund managers to enter this space.
John Street Capital, a venture capitalist and financial researcher, noted that Coinbase is a highly profitable company with $1.8 billion in annual revenue.
In addition to compelling financial reports and revenue, Coinbase’s user base is much larger than Cash App and Venmo.
In fact, Coinbase has the largest user base of any financial institution in the United States, with the exception of JPMorgan. The researcher wrote:
The @coinbase team announced Q1 21 data including ~$1.8 billion in revenue, another $1.1 billion in EBITDA, $730-800 million in KPIs, $335 billion in exchange volume and $223 billion in assets on the platform (11.3% of the crypto currency market) with 56 million users for $7.2 billion in revenue, $4.4 billion in EBITDA and $3.0 billion in KPIs. User #56M is bigger than @CashApp & @Venmo and much bigger than @RobinhoodApp & @eToro . That’s more than any bank not named $JPM.
Although some traders think that the crypto could spike after listing on Coinbase, the market sentiment is very positive with the listing.
Asked about the importance of Coinbase’s listing, Ben Lilly said:
You still need that bridge. The value of old markets to a struggling company is a bridge. Older investors can now cross the bridge and realize that this is an untapped ocean of investable assets. They may not invest immediately, but their system for estimating the value of an asset becomes simpler.
Mike McGlone, senior commodities strategist at Bloomberg Intelligence, also said Coinbase’s IPO could push bitcoin to $70,000. He said:
Bitcoin IPO could propel #Bitcoin to $70,000 like #Tesla to $60,000 – Lowest 30-day volatility since October suggests bitcoin is ready to break out of its cage, with a sustained bull market favoring the next move of $10,000. Looks like Tesla is giving money to Bitcoin…..
How did Galaxy Digital perform when it was listed on the Canadian Stock Exchange?
Another cryptocurrency company that went public last year is billionaire investor Mike Novogratz Galaxy Digital.
Since listing on the Canadian Stock Exchange, Galaxy Digital’s shares have increased more than 20-fold.
Galaxy Digital share price. Source: Yahoo Finance
While the business model and market capitalization of the two companies are significantly different at launch, it shows my interest in crypto-focused publicly traded companies at launch, which will likely impact the value of COIN.
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