Shares of cryptocurrency trading platform Coinbase closed Wednesday at $328.28 to give the company a market value of nearly $86 billion.
The closing price was down 13.8 percent from its opening price, but 31 percent up from its previous close of its reference price of $250, according to Yahoo Finance. At the end of the day, more than 79 million shares were traded.
Trading opened at $381 per share and quickly climbed to over $420 per share. The company went public via a direct listing on the Nasdaq under the symbol COIN.
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“Coinbase becoming a public company will turbocharge the category,” said Barry Schuler, managing director at DFJ Growth, via email. “It is a signal that the category has arrived. It also is the first blockchain-based financial services company at scale that passed the regulatory scrutiny.”
Schuler led the firm’s investment into Coinbase’s $75 million Series C round in 2015. Since then, he has been on Coinbase’s board.
San Francisco-based Coinbase set its reference price on April 13 at $250 per share, which is likely to give the company a valuation of approximately $68 billion, Schuler said. That is miles above Coinbase’s last self-reported valuation in 2018 of $8 billion after securing $300 million in a Series E round.
Although he couldn’t comment more on the actual valuation, he said analysts expected investor interest could push that up to $100 billion or more.
As a result, Schuler expects accelerated innovation and growth as “lots more venture capital will flow into young companies building out key parts of the future vision.”
And, Richard B. Levin, partner and chair of the fintech and regulation practice at Nelson Mullins Riley & Scarborough, also told me via email that Coinbase going public will influence the current regulatory scheme around the crypto industry.
“The Securities and Exchange Commission approved the listing of this currency, and the company has also signaled its intent to move into other financial services areas, as evidenced by some of their recent hires and initiatives,” Levin said. “Moreover, this is a signal of the maturation of the industry as a whole and the growing level of comfort of U.S. regulators with members of the industry, as long as they comply with the applicable laws, rules and regulations.”
He expects more cryptocurrency companies to conduct offerings of their securities in the United States, but will have to do so by complying with 70- or 80-year-old laws that, though considered antiquated by fintechs, will still be required, including how digital asset securities are traded. Coinbase, for example, has a subsidiary that is a registered broker-dealer and alternative trading system to trade digital asset securities, Levin said. Because most digital assets have been deemed securities, he believes many other firms will follow suit in advance of public offerings, or following public offerings, to trade through that subsidiary.
Illustration: Li-Anne Dias
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