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Mish Schneider

How important is Coinbase’s debut really?

In this article, Forrest Crist-Ruiz, assistant director of trading research and education at MarketGauge.com, considers the wide-reaching effects of the Coinbase IPO.

The Nasdaq 100 (represented by the Invesco QQQ ETF [QQQ]) has made new all-time highs ahead of Coinbase’s direct listing on 14 April.

Coinbase is currently the most popular exchange for buying cryptocurrencies and has attracted a large amount of popularity and hype before it releases, as market analysts throw out wildly different estimates ranging from $20bn to more than $100bn.

When it comes to new stock releases, from our perspective, the best plan is to wait for the dust to settle.

Without any prior trading history, highly speculative estimates can be fun to think about, but often do not have a good track record of helping position size for the unknown volatility that often takes place with a new listing.

However, Coinbase, which will be listed on the Nasdaq Stock Exchange under ticker COIN, has a deeper meaning than any other publicly traded company.

It brings yet another level of legitimacy to the cryptocurrency space, which has gained a huge amount of momentum over the past six months.

Additionally, many banks have been working on creating infrastructure for cryptocurrencies and companies investing directly into Bitcoin.

There are also companies that are willing to accept payment in Bitcoin and other cryptocurrencies.

On top of several traditional banks that have already been working on creating infrastructure and services for cryptocurrencies, there are also banks emerging with the sole purpose of providing cryptocurrency and fintech services.

Because of this, Coinbase could give another boost to the tech sector, as it will be one of the first publicly traded companies that helps people buy cryptocurrencies.

Its further adoption paves the way for both new and existing tech companies to join the space, with increased demand for cybersecurity, computer chips, crypto banking, and transaction software.

This article was originally published on MarketGauge. With over 100 years of combined market experience, MarketGauge's experts provide strategic information to help you achieve your investing goals.

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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