Coinbase caused a sensation in the market debut business news with a valuation of $ 99.6 billion
The cryptocurrency exchange Coinbase was trading at nearly $ 100 billion (£ 72 billion) on Wednesday, which gave a big boost to supporters of digital currencies like Bitcoin.
Coinbase shares opened on the Nasdaq at $ 381 (£ 276), hurtling past the $ 250 reference price and valued the exchange at $ 99.6 billion (£ 72 billion).
The rating means that Coinbase is worth more than traditional financial institutions like HSBC, Barclays and Standard Chartered.
It’s the first time a major cryptocurrency company has gone public, and it’s a milestone for a technology that was once considered trivial.
Coinbase makes money on transaction fees and has skyrocketed its profits as cryptocurrency trading has been booming since the pandemic began.
Record levels of cash have flowed into digital currencies such as Bitcoin and Ethereum, which has increased Coinbase’s margins. Both saw meteoric price increases over the past year, up over 800% and 1,300%, respectively.
Thanks to that, Coinbase posted an estimated net income of $ 730 million (£ 530 million) to $ 800 million (£ 580 million) in the first three months of 2021, while revenue of 1.8 billion euros over the same period. USD (£ 1.3 billion) was reported.
“The coin-based IPO may be a turning point for the crypto industry and will be something the road will focus on to gauge investor appetites,” Daniel Ives, an analyst at Wedbush, said in a statement to the Investors.
The company is a “fundamental piece of the crypto ecosystem,” he said.
Coinbase was founded in 2012 by Brian Armstrong, a software engineer at Airbnb, and Fred Ehrsam, a reseller at Goldman Sachs.
The couple set out to make it easier to buy and sell Bitcoin at a time when the currency was mainly used by hobbyists fascinated by its technology and criminals drawn by its anonymity.