Coinbase, the leading US cryptocurrency exchange, will soon be a public company once the COIN stock launches on the Nasdaq exchange on April 14th.
In general, sentiment regarding the listing in both the crypto and traditional financial markets has been largely positive. With the date only a day away, analysts have shown different perspectives on how the listing could affect Bitcoin and Altcoin prices.
Coinbase rally, crypto top?
As Cointelegraph previously reported, Coinbase is not currently going public.
Instead, the stock exchange is listed directly on the Nasdaq, which circumvents the often costly cooperation with investment banks for companies.
Despite the lack of participation by investment banks in Coinbase’s listing, there is considerable hype surrounding COIN.
While speaking about CNBC’s Squawk Box on April 12, Jim Cramer said:
“You will have to buy Coinbase if this deal comes off. While this is a $ 100 billion deal, it is common knowledge that many companies will switch. MicroStrategy has always been a leader, so others want to follow suit.”
“You have to buy $ COIN when this deal comes up,” @JimCramer says. “This is a $ 2T market that potentially goes to $ 3T.” # Btc #bitcoin pic.twitter.com/ItLMx1tbIl
– Squawk Box (@SquawkCNBC) April 12, 2021
There are several reasons why investors in the traditional financial market are optimistic about COIN.
The two main factors are above all exposure to the crypto market without owning cryptocurrencies and Coinbase’s lucrative business model.
According to Ben Lilly, co-founder of Jarvis Labs:
“Coinbase is the turning point in terms of legitimizing some of the reviews you see in Crypto, especially DEXs, which have a tiny fraction of the number of employees and Opex [operating expenses] that has a Coinbase or ICE. Crypto is an asset of incredible volume and diversity that will continue to grow. Coinbase shows how profitable exposure to this market can be. I also expect a surge in M&A and VC activity as private investors seek exposure to this area from their fund managers. “
A financial researcher with John Street Capital, a venture capital firm, found that Coinbase is hugely profitable with annual sales of $ 1.8 billion.
In addition to the compelling financial report and revenue, Coinbase’s user base is much larger than that of Cash App and Venmo.
In fact, with the exception of JPMorgan Chase, Coinbase has the largest user base of any financial institution in the United States. The researcher wrote:
“The @coinbase team announced data for the first quarter of 21 including revenue of ~ $ 1.8 billion, adj-EBITDA of $ 1.1 billion, NI of $ 730 million to $ 800 million Trading volume of USD 335 billion and assets on the platform of USD 223 billion (11.3% of the Cryptoasset market) with USD 56 million user run rate of USD 7.2 billion in revenue / USD 4.4 billion EBITDA / $ 3.0 billion NI. The 56 million users are bigger than @CashApp & @Venmo and significantly bigger than @RobinhoodApp & @eToro. That’s more than any bank that is not called $ JPM. “
Although some traders believe that crypto could peak after the Coinbase listing, the market sentiment building towards the listing is very positive.
When asked about the importance of the Coinbase list, Ben Lilly said:
“You always need that bridge. As old markets appreciate a company that is in crypto, that bridge is. Now old investors can walk across the bridge and realize that it is an untapped ocean of investable assets. They may not invest immediately, but your framework for how to rate something becomes easier. “
Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, believes Coinbase’s “IPO” could push Bitcoin to $ 70,000. He said:
“Coinbase’s IPO may push #Bitcoin to $ 70,000, like #Tesla to $ 60,000 – the lowest 30-day volatility since October shows Bitcoin is ripe to leave its cage and the bull market continues preferred for the next step of $ 10,000. Asset allocation to Bitcoin .. “
How did Galaxy Digital perform when it was listed on the Canadian Stock Exchange?
Another crypto firm that went public last year is billionaire Mike Novogratz’s Galaxy Digital.
Since Galaxy Digital was listed on the Canadian Stock Exchange, its stock has grown more than twenty-fold.
Although the business model and market capitalization of the two companies at launch are very different, it shows that there is interest in publicly traded crypto-focused companies at launch, which is likely to be reflected in the value of COIN.