Coinbase Offering Is ‘Landmark Moment’ for Crypto, Here Is Why

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Coinbase Offering Is ‘Landmark Moment’ for Crypto, Here Is Why
Image source: <a href="https://www.coinbase.com/">Coinbase.com</a>

In a landmark moment for the crypto industry, Coinbase Global Inc (NASDAQ:COIN) was valued at $85.8 billion in its listing on the Nasdaq stock exchange.

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Q1 2021 hedge fund letters, conferences and more

Insights from thought leaders in the crypto industry, as to what this development means for the industry and the financial services industry at large.

Southpoint Capital likes these stocks [Q1 Letter]

Clint Carlson Far ViewSouthpoint Qualified Fund and Southpoint Qualified Offshore Fund returned 2.5% net for the first quarter, compared to the S&P 500's 6.2% return and the Russell 2000's 12.7% gain. During the first quarter, Southpoint's funds averaged 133% long and 70% short. Q1 2021 hedge fund letters, conferences and more The fund's long positions added 13% gross Read More


Cryptocurrency Is No Longer Underground Money

Masakazu 'Senshi' Kikuchi, CEO of Secured Finance, said:

Coinbase's listing brings a frame-shift to global users that cryptocurrency is no longer underground money and to become a legitimate currency. Its valuation can be higher than Facebook's IPO of $104bn, impressing people that blockchain technology underpins a global financial infrastructure.

Traditional finance institutions have to change gears to driving mode and start seriously researching cryptocurrency for their clients. They should expect much broader investors and higher trading volume; thus, it's inevitable to move onto crypto. This move could stimulate a consolidation among centralized crypto companies. 

There are potential challenges for banks to expand the crypto business is the cryptocurrency's risk weight under BIS regulation. So, the installment of full-scale crypto finance could take time. In this regard, the fast-growing decentralized finance (DeFi) can provide institutional-scale services in a peer-to-peer manner.”

The Coinbase IPO: A Landmark Event

Nicholas Pelecanos, Head of Trading at NEM commented: 

Beyond being a landmark event in the crypto space, the Coinbase IPO signals the transition from crypto being a fringe alternative asset to being accepted by institutional investors.

Valuations for the company are estimated around $100 billion and some prediction markets are even pricing in >$150 billion valuations. In my opinion these are over valuations for the company but representative of the current bullish interest in crypto markets. Coinbase stock will likely act as conduit for mainstream money to gain an exposure to the crypto ecosystem. As a result I expect the stock to correlate closely with the BTC price action.

The broader impacts of this IPO for crypto will likely see further interest in the space due the publicity of the event, further institutional adoption and strong price appreciation of exchange tokes like BNB and FTT, contingent of course on a successful listing for Coinbase.

Mainstream Adoption Among Both Retail And Institutional Investors

Konstantin Richter CEO and Founder of Blockdaemon commented: 

The public listing of Coinbase is a landmark moment for the crypto industry, which firmly cements crypto’s place in the mainstream among both retail and institutional investors. On one level the massive valuation of a crypto company offers validation of the sector as a whole and the incredible levels of growth it is generating. Even more significant, however, is the mass adoption of crypto that the listing will lead to and the different options users have to engage with crypto. Prominent exchanges, custodians, wallets, and crypto platforms are pushing the envelope to make it easier to participate and create access to wealth for all. Cryptocurrencies remain a nascent technology, popular primarily with early adopters, this listing would seem to indicate that we are now entering a new exciting phase of global mass adoption. 

It is a significant moment for a thriving ecosystem of blockchain based use cases and financial infrastructure which can revitalize existing legacy systems of payments and finance, and is likely to precipitate a new wave of capital investment into, and adoption of blockchain based infrastructure. A fear of missing out on cryptocurrencies is already awash among legacy financial institutions and this listing will further fuel investment into the sector. Industry growth is likely to accelerate even further, with new on-ramps for users to adopt cryptocurrencies such as PayPal building a global network effect--the next six months will be an incredibly exciting time for crypto.”

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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