With the growing popularity of cryptocurrencies, attention has inevitably shifted to the exchanges on which they are traded. The digital money fan base has long been looking forward to the Coinbase IPO taking place today. With a price doubling since the turn of the year and new records, Bitcoin & Co should now have finally arrived in the mainstream.
Anyone who buys a Tesla in the future can now pay with Bitcoin and Twitter boss Jack Dorsey and hip-hop mogul Jay-Z want to finance projects with a Bitcoin fund. But more and more banks like Morgan Stanley are also offering their wealthy customers access to the crypto markets. But whether you as an investor have to be part of the Coinbase IPO is questionable whether the ratings for the marketplace that have now been called up - an IPO at the right time or just hot air?
Worth more than any traditional exchange operator
Coinbase wants to go public through a direct listing on the Nasdaq and will not generate any additional income from the IPO. Interestingly, there is no address for a head office in the documents submitted, there is only a "remote-first" at this point. The company, which operates the largest US exchange for Bitcoin and other digital currencies, is likely to achieve a larger market capitalization after going public than any of the traditional exchange operators in the world. Coinbase is closely linked to the fluctuations in the crypto market and lists around 50 other crypto currencies for trading in addition to Bitcoin.
The competition never sleeps
The competition in this market is not sleeping either, the industry is developing at a pace with which the Coinbase share price could have difficulty keeping up with the current very high valuation in the future. Based on a share price of $ 350 in a private placement earlier this year, Coinbase is worth nearly $ 91.5 billion. However, private trade is more restrictive and the volumes are generally lower than on the public markets and therefore do not clearly reflect the company's value. What is interesting is that Coinbase achieved this rating even before the release of the resounding results for the first quarter, when it benefited from the enormous rally in the Bitcoin price. From January to March, the trading platform was able to gain 13 million new users and achieve a profit of 730 to 800 million dollars on a turnover of 1.8 billion dollars. That alone is now more than double that of the entire past year.
More than just an exchange
With Coinbase, the user does not incur any costs for storing cryptocurrencies in the popular wallets. Instead, the company earns fees and commissions when buying or selling cryptocurrencies like Bitcoin and Ethereum. This means that the business model does not differ that much from that of classic stock exchange operators. Coinbase also offers online merchants software with which they can accept payments in Bitcoin & Co. In addition, Coinbase plans to give its users a physical credit card plus app to spend cryptocurrencies in the physical world by converting them into US dollars when the card is used. Last but not least, Coinbase has its own cryptocurrency on offer, the USD Coin (USDC), which is based on the Ethereum platform. Its value is tied to the US dollar, so 1 USDC is always worth one US dollar.
The Coinbase share is also a bet on the Bitcoin
Investors who now rely on Coinbase are also making a bet for the moment that Bitcoin will continue its rise as a speculative asset class. The most popular cryptocurrency has not become a primary medium of exchange in the economy as the fans of the first hour had hoped, but at least it has become a fixed asset like gold and thus an investment not only for private individuals, but increasingly also for institutional ones Investors. Bitcoin has no intrinsic value, but neither does gold, and investors are still obsessed with the yellow metal. This prospect of digital gold has helped fuel the recent surge in Bitcoin, largely as more institutional investors have given up their skepticism and embraced the issue.
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