Coinbase, which operates the largest US cryptocurrency exchange, is set to list today on Nasdaq, marking a pivotal moment for cryptocurrencies.
The listing comes at the time of bull run in cryptocurrencies with bitcoin more than doubling from January to cross $60,000 barrier.
Valuation
On private exchanges, shares of Coinbase have traded at between $200 and $375 this year. At the top end of that Coinbase will have a market capitalisation of almost $74 billion, more valuable than the parent of the New York Stock Exchange. Its valuation would top $110 billion when including options and other kinds of stock-based awards. Coinbase holds funds for more than 43 million retail customers.
Transactional fees made up more than 96 per cent of Coinbase’s net revnues last year, with dealings in bitcoins accounting for 44 per cent of the fee business, it said. In the first quarter it reported adjusted earnings of Z$1.1 billion on revenues of $1.8 billion.
Landmark victory
The largest US cryptocurrency exchange’s listing on the Nasdaq on Wednesday is considered a landmark victory for cryptocurrency advocates.
The world’s biggest cryptocurrency, which has growing mainstream acceptance as an investment and a means of payment, rose as much as 5% on Tuesday. Smaller rival Ethereum also reached a record high of $2,205.
Major firms including BNY Mellon, Mastercard Inc and Tesla Inc are among those to have embraced or invested in cryptocurrencies.
Bitcoin topped $60,000 early last month, fuelled by Tesla’s move to buy $1.5 billion of the digital currency for its balance sheet. For the past two weeks, it had traded in a tight range.
“When bitcoin markets create new highs the price often range-trades and we witness a round of profit-taking,” said James Butterfill of digital asset manager CoinShares. “During this most recent period have witnessed a similar profit-taking round, which now looks to have run its course.”
Cryptocurrency as inflation hedge
Investors are talking more about cryptocurrency as a hedge against the potential for higher inflation and the debasing of the dollar and the extreme amounts of government spending and government debt.
How bitcoin reacts this week could set the tone in the cryptocurrency market for weeks to come. He There was substantial resistance at $62,000, which it has now blown through, and there is solid support at its 50-day moving average, near $54,900.
Subscribe to ETBFSI Daily Newsletter and stay updated.
https://bfsi.economictimes.indiatimes.com/etnewsletter.php
