coinbase, a san francisco startup that allows people to buy and sell digital currency, became the first major cryptocurrency company to go public when it made its stock market debut on Wednesday.
Listing started around $381 per share, raising the company’s valuation to about $100 billion. that’s what facebook was worth when it had its initial public offering in 2012.
Reading: Bitcoin going public
coinbase’s listing on the nasdaq under the symbol “currency” was heralded by enthusiasts as a turning point for once obscure digital currencies.
“Today was a historic moment,” said cryptocurrency investor Ian Lee. “crypto is the future of finance.”
Bradley Tusk, a political consultant and venture capitalist who financially backed Coinbase, said the company’s public offering shows that more Wall Street banks and other traditional investors are getting excited about the idea of cryptocurrencies.
“People have had doubts about crypto for a long time and I don’t blame them,” Tusk said. “But what it became, whether it was intended or not, is an asset class, something that people looking for a really balanced portfolio want to be in.”
but tusk acknowledges that cryptocurrencies are notoriously volatile.
“Will cryptocurrency ever be used for everyday items? I’m not sure,” Tusk said. “But another way to think about it is, are we going to get to a point where all payments are digital and we don’t use cash or credit cards? Absolutely.”
That point, however, may be a long way off.
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Investment firm wedbush securities predicted on Wednesday that less than 5% of public companies will invest in cryptocurrencies in the next 18 months, but that “it could rise markedly as more regulation and acceptance of this currency takes hold in the market.” future”. “
coinbase’s mission: to build “the crypto economy”
in 2012, former airbnb software engineer brian armstrong became frustrated with “high fees” and the “opaque” nature of digital transactions abroad, so he and former goldman sachs trader fred ehrsam they founded coinbase, where people can easily buy and sell cryptocurrencies without going through a bank.
Like many startups in the crypto world, coinbase has positioned itself as a company that has the potential to disrupt the global financial system.
“Today, the way we invest, spend, save, and generally manage our money remains cumbersome, inaccessible, expensive, and regionally isolated,” Coinbase wrote in a filing with the Securities and Exchange Commission. “We are building the crypto economy: a more fair, accessible, efficient and transparent financial system for the internet age.”
At the time of filing in December 2020, Coinbase told regulators that 7,000 financial institutions and retailers and 43 million users were active on the platform.
armstrong, 38, is now considered one of the richest people in the world, with a 21% stake in the company valued at about $13 billion.
“There is a saying that the best way to predict the future is to create it. We hope we have helped make the future happen a little sooner than it would in the crypto space,” Armstrong tweeted on Wednesday.
Researchers have long noted the appeal of cryptocurrencies to those involved in fraud and other illicit activities such as money laundering, as largely unregulated markets make it easy to hide transitions. And lawmakers in Washington have been working to craft rules and regulations to bring government oversight to the industry.
but with laws slow to adapt, interest in crypto markets has been booming, especially during the pandemic.
At the end of 2020, for example, a single bitcoin cost around $28,000. the price has more than doubled since then. As of Wednesday, a bitcoin costs around $62,000.
Other cryptocurrencies, such as ether, which is bought and sold on the ethereum system, have also hit new all-time highs.
They’ve been helped by the hype around non-fungible tokens, or nfts, digital collectibles that are fetching impressive sums for what is essentially a string of computer code that confirms that a buyer has a unique version of something. that exists only on the internet.
For the fang of venture capitalists, a larger issue is rising from the froth around cryptocurrency-related spending during the pandemic.
“People have less trust in the government, the media and wall street than ever before,” Tusk said, adding that many now trust the decentralized system that supports cryptocurrencies.
But, he said, there’s a less magnanimous component to this moment that sparks a crypto craze: “Everyone was home and bored and messing around on their computers, which didn’t hurt.”
The topic of debate is whether that rumor will persist as the world opens up and people are less attached to their devices.
tusk said he invested in coinbase because it makes money on both sides of crypto transactions, but he doesn’t feel comfortable buying crypto himself.
“I don’t have a great read on whether bitcoin is going to go up or down,” he said. “so I don’t trade the currency at all.”
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