Cryptocurrency exchange Coinbase goes public in march towards the mainstream

Coinbase’s stock opened at $381 per share, up 52.4 per cent from a price point of $250 per share set on Tuesday.

Founded in 2012, the firm boasts 56 million users globally and an estimated $223 billion assets on its platform, accounting for 11.3 per cent of crypto asset market share, regulatory filings showed.

“We’re just very grateful to be able to bring transparency to the crypto economy, the ecosystem that we’ve all been building over the last 10 years,” Coinbase Chief Financial Officer Alesia Haas said.

“It just brings this level of recognition that this is an industry that is here, that is growing, and that (is not just) in the corners.”

Coinbase was valued at just under $6 billion as recently as September, but has surged in line with bitcoin’s gains this year.

The world’s biggest and best-known cryptocurrency hit a record of over $63,000 on Tuesday and has more than doubled in value this year as banks and companies warmed to the emerging asset.

BEHOLDEN TO BITCOIN?

The company’s most recent financial results underscore how revenues have surged in lock-step with the rally in bitcoin trading volumes and price.

In the first quarter of the year, as bitcoin more than doubled in price, Coinbase estimated revenue of over $1.8 billion and net income between $730 million and $800 million, versus revenue of $1.3 billion for the entire 2020.

“The correlation to bitcoin will be very high after the stock stabilizes after listing,” said Larry Cermak, director of research at crypto website The Block.

“When the price of bitcoin goes down, it’s inevitable that Coinbase’s revenue and inherently the price of the stock will decline as well.”

WATCH | Answers to some common questions about cryptocurrency

Cryptocurrency is big business, but for many not in the tech sphere, it’s still a big unknown. Here are answers to some questions you might have. 2:31

Regulatory risks also loom, others said, as Coinbase increases the number of digital assets users can trade on its platform.

Coinbase last year suspended trading in major digital currency XRP after U.S. regulators charged associated blockchain firm Ripple with a $1.3 billion unregistered securities offering. Ripple has denied the charges.