Coinbase IPO Exceeds All Expectations, Showing More Promise For Bitcoin

Coinbase with Bitcoin and Ethereum coins
Credit: prima91 -

By Landon Manning

Reflecting the high energy everywhere in the world of bitcoin (BTC), major cryptocurrency exchange Coinbase (COIN) saw its valuation reach over $80 billion after its first day of public trading.

Founded in 2012, Coinbase is one of the largest and longest-operating cryptocurrency exchanges in the world, making over $1 billion in revenue in the first quarter of 2021 alone.

On April 1, 2021, the company announced that it would begin offering publicly-traded shares, being listed on the Nasdaq under the name $COIN, following approval from the U.S. Securities and Exchange Commission. The launch happened with much fanfare on the appointed day, with company executives hosting discussions about their ambitious plans for Coinbase’s future.

Although expectations were already high, the valuation of this new stock exceeded them, with The New York Times calling it a “landmark moment” for bitcoin and the entire cryptocurrency industry. The Nasdaq placed a pre-emptive reference price of $250 per share, but at market open, each one traded for $381. This price spiked before descending slightly in the evening, bringing the final price by market close of $328, making the company’s new net worth somewhere in the range of $85 billion. 

With the company originally founded to facilitate the purchase and trading of bitcoin, it’s no surprise that the massive successes that this cryptocurrency has been enjoying recently is reflected in Coinbase’s own. Analysts have laid out the fundamentals behind this quite succinctly: it is the most popular cryptocurrency exchange, it’s never been hacked, which gives it a reputation of security, it has more than 10 percent of all bitcoin and other cryptocurrency in existence squirreled away on its platform, and it’s got an abnormally high profit margin that’s only looking rosier as time goes on. Even though this launch was monumental, experts have strong reason to claim that it’ll go up even more, as much as 50 percent, by the end of the fiscal year.

In short, the world of bitcoin is proving that it can continue to pull out crazy wins, despite many forecasts that the ride is going to end at any moment. Companies like Tesla have already been vindicated for their decision to back bitcoin to the hilt, but this is even more significant. It drew large amounts of goodwill when Elon Musk jumped on to the Bitcoin train, but Coinbase has been part of the bitcoin atmosphere for a long, long time. And, when its CEO is skyrocketed to the highest levels of wealth in a single day like this, people start to notice. Bitcoin and all of its attendants have made a major splash on the world of traditional finance, one that few are likely to forget.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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