Undoubtedly, the successful introduction of Coinbase Global (symbol: COIN) on the Nasdaq is a milestone in the course of the cryptocurrency market. It brings together the “exotic” crypto space with the traditional investment community. Expectations have taken off, along with the capitalisation of the well-known exchange.
Mike Novogratz, CEO of Galaxy Investment Partners, who focuses on cryptocurrency investments, believes that the listing of Coinbase will be as crucial as the entry into the Netscape stock market in 1995. On this occasion, the general public and investors began to learn about the Internet.
Bitcoin is something that until a few months ago was not even considered an asset by Wall Street. And now for the first time institutional and private investors have the opportunity to invest in a company of tens of billions. Whoever does not realise it, means that he has not paid the necessary attention to the trend.
Coinbase succeeded because it managed years ago to be the first easy step for a beginner to buy cryptocurrencies. Then it had the insight to make the right turn to institutional investors. Coinbase played a “key role” in the institutional shift in favour of crypto. Michael Saylor has given them the credit for that. MicroStrategy itself acquired its Bitcoin through Coinbase. Of the 230 billion in digital assets under its supervision, 122 belong to institutional investors.
Brian Armstrong, co-founder of Coinbase, reassures the “stress” of investors. He responds by saying that in the next 5 to 10 years, the inflow of money from the commissions of the transactions will be less than 50% of the total income. Much less than the 86% it is now. They plan to expand into institutional custody, debit and credit card issuance and staking. Coinbase also has a venture capital division, Coinbase Ventures, which invests in companies such as CoinTracker, Compound and BlockFi.
Some consider the COIN share price excessive and that the company does not offer anything new. They are simply mediating in the buying and selling of a new asset and in fact extremely volatile, a service that will soon be offered by the NYSE – New York Stock Exchange – or the Nasdaq. Competition will also drive transaction commissions down, hence the company’s profit margins. Something not good, considering that it is already “expensive”. Based on the valuation criteria of the Intercontinental Exchange (ICE) and the Nasdaq (NDAQ), it should increase its revenue by 150% and the margin should be multiplied.
Of course, this calculation does not take into account the growth potential of an exchange in a highly dynamic market such as cryptocurrencies. No one knows how much the crypto ecosystem can grow. That is why Coinbase’s market capitalisation exceeds the sum of the capitalisation of ICE and NDAQ, making it the 7th largest public offering in US history. Not only is it gaining more and more users, but it can also be extended to other innovative products and services such as NFTs.
One of them is shares; Binance has shown the way, another large exchange, which now allows its users to buy shares of shares, starting with Tesla. Binance customers can buy just one bit of a Tesla stock. Of course, it is not a regular stock, the holder does not have the right to vote, but it gives a chance to small investors, who may not have or do not want to spend $750 that a regular Tesla stock has, to gain exposure and earnings if the stock price goes up.
Binance also announced that one of the next stock tokens will be Coinbase. Due to the endless potential of the space, Binance Coin has risen sharply in recent times, taking advantage of Ethereum’s inability to offer low transaction fees. At the beginning of the year, it was valued at $37 and now is at $550. In 3.5 months, it has multiplied its value 15 times and now the Binance Coin is worth almost as much as Coinbase.