Cryptocurrency prices hike ahead of Coinbase listing
By Claire Hunte
13:09, 14 April 2021
As Coinbase, the US’s largest bitcoin exchange, readies to begin trading on Nasdaq today, it’s helping to fuel a surge in prices in bitcoin and other cryptocurrencies.
Bitcoin enjoyed record highs up to $64,829 (£47,000, Є54,000), Ethereum followed the upward trend reaching $2,399.61 (£1,739, Є2,003) and Ripple also jumped 5.32% to $1.77. The coin created as a joke, Dogecoin, rose 77% to $0.13 although it did manage to hit $0.14.
Selling the 'picks and shovels'
When it goes public Coinbase’s valuation is set between $65bn and $100bn. Nasdaq set the reference price at $250. Its CEO, Brian Armstrong, considered at the top of the blockhain billionaires list with a net worth of around $11.5bn, in a recent interview on CNBC about the valuation of Coinbase and its correlation to Bitcoin had this to say:
“People have asked me should I invest in Coinbase or should I invest in the underlying asset? I would always tell them first of all why not do both? Both are great ideas but I can make a case for why people may want to invest in Coinbase too, which is that we’re kind of …not only are we not tied to one crypto asset, we’re adding support to over a 100 crypto assets now and there will be more and more in the future. And, we’re also what you might call an index to bet or a levered bet on the crypto space more broadly because we’re selling picks and shovels, we’re helping people access and use this new technology.”
Coinbase now has the same valuation effectively as the New York Stock Exchange, Armstrong said that although there will be correlation there will be an addition to their share price on top of the price of crypto.
More than a fintech
When asked to discuss how investors should categorise the exchange comparable to fintechs like PayPal or Square, Armstrong’s explanation suggested it wasn’t an easy comparison saying, “I think it’s tough to come up with an exact comparable, it’s kind of like saying Tesla is a car company, well yes but it’s also kind of like a software company. Or… Amazon is a retailer but it is also a software company so Coinbase is technology, it’s software, its cybersecurity, it also has aspects of financial services with compliance and legal and various other licences that we’ve gotten.”
While Armstrong agrees Coinbase meets that definition of fintech he points to a difference adding, “Because most fintech companies are really building the USX layer on top of all the same underlying rails, whether that’s ACH transfers or SWIFT or wire transfers or credit cards and so a lot of their services look similar and they’re innovative at the USX layer but they’re all at the pricing and the speed of which transactions move and everything is kind of similar underneath. We’re unique you can think of us as the first fintech that is vertically integrated.”
READ MORE: Coinbase IPO: another way for investors to profit from the crypto boom?
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