{"id":211682,"date":"2021-03-26T16:57:00","date_gmt":"2021-03-26T13:57:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/catalytic-event-or-unbridled-optimism-coinbase-approaches-public-listing\/"},"modified":"2021-03-26T16:57:00","modified_gmt":"2021-03-26T13:57:00","slug":"catalytic-event-or-unbridled-optimism-coinbase-approaches-public-listing","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/catalytic-event-or-unbridled-optimism-coinbase-approaches-public-listing\/","title":{"rendered":"# Catalytic event or unbridled optimism? Coinbase approaches public listing"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a27664c33380\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a27664c33380\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/catalytic-event-or-unbridled-optimism-coinbase-approaches-public-listing\/#Perfectly_weighted_up\" >Perfectly weighted up?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/catalytic-event-or-unbridled-optimism-coinbase-approaches-public-listing\/#Cutting_out_investment_banks\" >Cutting out investment banks<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/catalytic-event-or-unbridled-optimism-coinbase-approaches-public-listing\/#Whos_next\" >Who\u2019s next?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/catalytic-event-or-unbridled-optimism-coinbase-approaches-public-listing\/#A_milestone_industry_event\" >A milestone industry event?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Catalytic event or unbridled optimism? Coinbase <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roaches public listing <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-5a136f3a>The Coinbase direct stock listing could be a rite of passage for the blockchain and cryptocurrency industry, and the announcement on March 20 by the United States Commodity Futures Trading Commission of a $6.5-million fine against Coinbase for \u201cwash trading\u201d and filing misleading information probably won\u2019t do more than postpone by a few weeks the distinction of being the first crypto-native corporation to be listed on a major U.S. stock exchange.<\/p>\n<p>But questions surround Coinbase\u2019s upcoming debut on the Nasdaq exchange: Is the crypto exchange really worth the $100 billion \u2014 as suggested by a pre-IPO public auction? Is its timing propitious? Are the firm\u2019s revenues too dependent on the market price of Bitcoin (BTC) and Ether (ETH)? And are its profit margins really sustainable \u2014 is this really an industry breakthrough event, and if so, which crypto enterprise might be next to test Wall Street\u2019s waters? <\/p>\n<p>But first, what is one to make of charges of improper reporting of exchange volume and \u201cself-trading\u201d that were settled with the CFTC? Could they scuttle the listing? <\/p>\n<p>\u201cThe CFTC announcement should not really derail investor interest with the Coinbase direct listing,\u201d Edward Moya, a senior market analyst at forex trading company Oanda, told Cointelegraph, mainly because \u201cmainstream acceptance has arrived for cryptocurrencies.\u201d Any fines will have only a short-term effect in his view. Indeed, they might even, in a way, reassure potential investors, providing further confirmation that the space is regulated, Moya told Cointelegraph. <\/p>\n<p>Kavita Gupta, founding managing partner at Delta Growth Fund LP &amp; Fintech.TV and visiting scholar and lecturer at Stanford University, appeared to agree. \u201cAs an investor, I would read it as a positive sign that Coinbase is clearing up any possible issues before going public and would play fair to regulatory bodies and the public investors,\u201d she told Cointelegraph. <\/p>\n<p>On the other hand, the fine could impede the listing process, suggested David Trainer, CEO of investment research firm New Constructs, though the fine is relatively small, suggesting that the illegal activity may be seen as relatively inconsequential \u2014 \u201cso it might not pose much of an issue in the grander scheme.\u201d That said, \u201can issue with trading integrity for an exchange is serious \u2014 no matter how big or small,\u201d he commented to Cointelegraph. <\/p>\n<p>\u201cThe fine is just a slap on the wrist for Coinbase,\u201d declared Bobby Ong, co-founder and chief operating officer of crypto data aggregator CoinGecko, told Cointelegraph, adding: \u201cIt was cited as a risk factor in the Coinbase S-1 filing, and this settlement removes one risk factor.\u201d <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Perfectly_weighted_up\"><\/span>Perfectly weighted up?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Back in December, Moya told Cointelegraph that Coinbase\u2019s initial public offering was \u201cperfectly timed\u201d given Bitcoin\u2019s growing investment appeal. Has anything changed?<\/p>\n<p>Not really. \u201cInstitutional and retail interest is still in the early stages of mainstream acceptance, and this is the peak time for a bullish perspective with cryptocurrencies,\u201d answered Moya, adding further: \u201cEventually, over the next few years, governments will clamp down on Bitcoin and push their respective digital coins, and that could lead to concerns that the Bitcoin party is over. [&#8230;] The pressure is on for Coinbase to go public.\u201d<\/p>\n<p>\u201cIt\u2019s a great time for Coinbase to test waters,\u201d commented Gupta. IPOs and the special purpose acquisition company IPO markets are still sizzling; cryptocurrencies have soared in recent months; there\u2019s enormous liquidity; \u201cand demand in the market for tech companies creates the best time for Coinbase to ring the bell.\u201d<\/p>\n<p>But, how much would Coinbase be worth as a publicly owned company? As noted, one pre-IPO valuation put the company as high as $100 billion \u2014 is that realistic?<\/p>\n<p>Vladimir Vishnevskiy, director and co-founder of Swiss wealth management firm St. Gotthard Fund Management AG, told Cointelegraph that the $100-billion valuation could be justified given the potential of the digital asset sector and \u201cthe impact it could potentially have on our lives in the future.\u201d Moreover: <\/p>\n<blockquote><p>\u201cIf market participants are willing to entertain price targets\/predictions for Bitcoin in the $300K\u2013$400K range, is a $100-billion valuation for Coinbase so overstretched?\u201d<\/p><\/blockquote>\n<p>Moya, too, was optimistic, though not quite ready to swallow $100 billion. \u201cCoinbase\u2019s market value will probably settle around the $80 billion\u2013$90 billion range, but that could easily change with whatever is the next 20% move for Bitcoin.\u201d<\/p>\n<p>Trainer, by comparison, was skeptical. \u201cA more realistic valuation is probably closer to a 10%\u201325% of the current valuation,\u201d Trainer told Cointelegraph. \u201cOthers have gone so far astray because they lack a reliable fundamental perspective to give them a sense of value according to the underlying economics of the business and its long-term competitive position.\u201d<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-03\/67fca1be-f5b0-456c-aabc-71bd44276d5e.png\"><\/figure>\n<p>Along these lines, New Constructs analyst Kyle Guske <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.newconstructs.com\/can-you-make-coin-investing-in-coinbase\/\">wrote<\/a> recently regarding the $100-million tag that \u201cthe expected valuation implies the company will become the largest exchange in the world by revenue\u201d \u2014 something that\u2019s unlikely, given the rising competition in the cryptocurrency exchange sector and the non-sustainability of Coinbase\u2019s current market share and revenue margins, in his view.<\/p>\n<p>Coinbase\u2019s current ratio of transaction revenue to volume is 0.57%, for example, 57 times higher than margins at Nasdaq and Intercontinental Exchange \u2014 both with ratios of 0.01%. Guske wrote:<\/p>\n<blockquote><p>\u201cIf Coinbase\u2019s revenue share of trading volume fell to 0.01%, equal to traditional stock exchanges, its 2020 transaction revenue would have been just $20 million, instead of $1.1 billion.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Cutting_out_investment_banks\"><\/span>Cutting out investment banks<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Coinbase\u2019s offering would be the Nasdaq\u2019s first direct stock listing, where a company sells shares directly to the public, without using investment banks as inter<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>ries as with traditional IPOs. Investors would be able to sell their Coinbase\u2019s shares immediately after purchase, too, without the usual lockup period. Some have suggested that a direct listing was also consistent with the crypto ethos of cutting out the intermediary.<\/p>\n<p>Vishnevskiy called the direct approach a \u201csmart move,\u201d adding that it could be popular with retail investors, particularly in light of the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">Game<\/a>Stop saga. He agreed, too, that it is in line with the anti-establishment sentiment often expressed within the cryptoverse, saying:<\/p>\n<blockquote><p>\u201cOne could also interpret this as an indication of what is to come \u2014 i.e., the old ways giving way to new \u2014 and it will be the leaders of this new digital revolution setting the game rules, not the other way around. I am convinced there is no bank on Wall Street that would have refused the underwriting business for this listing if it was offered to them.\u201d<\/p><\/blockquote>\n<p>\u201cDirect listings are the much fairer way to distribute shares,\u201d commented Trainer, while Moya, for his part, said Coinbase had no choice but to opt for a direct listing because a traditional IPO would have delayed going public until closer to the end of the year. He added: \u201cThe retail interest for Coinbase\u2019s direct listing will be very strong, and yes, sticking it to the middleman provides some traders with a bit of added satisfaction.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Whos_next\"><\/span>Who\u2019s next?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Will a successful Coinbase offering spur other blockchain and cryptocurrency companies to go public? \u201cAfter the Coinbase IPO, there will be a rush of other crypto companies looking to go public either via IPO or SPAC to tap on the frothy valuation offered by the public markets,\u201d said Ong. <\/p>\n<p>Vishnevskiy, too, expected others in the industry to follow with IPOs, though they could find Coinbase\u2019s offering \u201ca difficult one to emulate,\u201d adding: \u201cThere are just not many other companies in the industry yet with the same pedigree and history as Coinbase, which is exactly why so many investors want to be part of it.\u201d <\/p>\n<p>Who might be next? \u201cI could certainly see Kraken being a contender for a listing this year, however, whether they could command a similar multiple in terms of valuation will be a big question,\u201d said Vishnevskiy, while Moya answered:<\/p>\n<blockquote><p>\u201cI\u2019m not tracking any specific private blockchain companies but would probably start looking at SoluLab and OpenXcell and eventually Binance will consider a direct listing.\u201d<\/p><\/blockquote>\n<p>Are there other possible obstacles to a successful Coinbase debut as a public company? Vishnevskiy expected the Coinbase listing to be over-subscribed. \u201cThe number of shares being offered is not that significant, and I expect high demand from both institutional and retail investors.\u201d The only potential roadblock ahead, he said, would be a decline in <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> market conditions: \u201cMarkets over the past month have been choppy, and if the mood does turn sour in April, it could dampen risk appetite slightly.\u201d Ong added: \u201cIt is always risky in the weeks leading up to an IPO,\u201d but he didn\u2019t see any significant roadblocks leading up to Coinbase\u2019s listing.<\/p>\n<p>Still, the crypto exchange has been dogged by service outages periodically through its history, a complaint that was raised again this week in a New York Times article: \u201cThe company sometimes still struggles to address basic customer service complaints,\u201d <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nytimes.com\/2021\/03\/24\/technology\/coinbase-bitcoin-complaints.html\">said<\/a> the paper, and quoted attorney David Silver that if Coinbase wants to be \u201cthe Goldman Sachs of crypto,\u201d then it \u201cneeds to maintain quality customer support.\u201d<\/p>\n<p>Meanwhile, Neil Wilson, chief market analyst for Markets.com trading, noted in a client letter at the time of Coinbase\u2019s S-1 SEC filing that the firm\u2019s earnings are inextricably tied to crypto prices. Indeed, most of Coinbase\u2019s net revenue is from transactions in just two crypto assets: Bitcoin and Ether \u2014 and the volatility of those cryptocurrencies could make Coinbase\u2019s earnings soar or plummet accordingly. <\/p>\n<p>Indeed, the company itself acknowledged in its filing: \u201cIf demand for these crypto assets declines and is not replaced by new demand for crypto assets, our business, operating results, and financial condition could be adversely affected.\u201d <\/p>\n<p>Gupta, too, acknowledged that Coinbase had exposure to crypto, and \u201ccrypto price volatility impacts their business\u201d in terms of revenues, liquidity and other areas, but she viewed this as another positive connected to the direct listing, as it might guide other crypto-native firms looking to follow in the exchange\u2019s footsteps:<\/p>\n<blockquote><p>\u201cHow their [i.e., Coinbase\u2019s] public stock [shares] weather bull and bearish markets would provide a roadmap for lots of blockchain companies to explore IPOs as a potential liquidity and fund raising route.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"A_milestone_industry_event\"><\/span>A milestone industry event?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Overall, should this still be viewed as a significant event for the blockchain and cryptocurrency industry \u2014 one that could spur more crypto adoption and\/or blockchain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> innovation?<\/p>\n<p>The Coinbase Nasdaq listing \u201cwill be a watershed moment for the entire blockchain and cryptocurrency industry,\u201d said Ong. It has already shown Wall Street how large the crypto industry is, \u201cand they have certainly woken up to the potential opportunities in this industry.\u201d <\/p>\n<p>Any offering of Coinbase\u2019s projected size will \u201cinevitably motivate more people and firms to try and get a piece of the action,\u201d said Trainer, and \u201ccan only help to propel the blockchain and cryptocurrency industry further.\u201d <\/p>\n<p>Speaking as an investor \u2014 indeed, one playing now in the SPAC IPO market \u2014 Gupta stated that \u201cCoinbase will be the torchbearer for the whole blockchain community in the public market,\u201d adding: \u201cIf you look at [crypto] exchanges across the world from Israel to India to Singapore, every exchange pitch is [based on the claim] that \u2018it is the Coinbase\u2019 of its region.\u201d <\/p>\n<p>According to Gupta: \u201cCompanies like CoinShares have already tested the water in more friendly European market exchanges,\u201d while in the U.S., mining firm Bitfury\u2019s SPAC IPOs have been oversubscribed. Events like these signal \u201cgreat timing for Coinbase,\u201d whose technology and revenue exceed many other IPO candidates in the United States.<\/p>\n<p>Overall, a Coinbase Nasdaq listing would \u201cput cryptos at the heart of Wall Street,\u201d Wilson told Cointelegraph. Blockchain and cryptocurrency firms would no longer be outsiders looking in \u2014 rather, they would now be \u201cpart of the club.\u201d<\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/catalytic-event-or-unbridled-optimism-coinbase-approaches-public-listing\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Catalytic event or unbridled optimism? Coinbase approaches public listing &#8221; The Coinbase direct stock listing could be a rite of passage for the blockchain and cryptocurrency industry, and the announcement on March 20 by the United States Commodity Futures Trading Commission of a $6.5-million fine against Coinbase for \u201cwash trading\u201d and filing misleading information&#8230;<\/p>\n","protected":false},"author":1,"featured_media":211683,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDMvMGIwOWNjZmUtMDM4NS00YzE2LThkZDMtMzk2NDc3NjBmYWY1LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74956,117,5007,70934],"class_list":["post-211682","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-coinbase","tag-business","tag-ipo","tag-regulation"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/211682","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=211682"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/211682\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/211683"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=211682"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=211682"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=211682"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}