It was one of the most hotly anticipated debuts in years.
Cryptocurrency exchange Coinbase, which operates the largest bitcoin exchange in the U.S., became the first major cryptocurrency company to go public in America on Wednesday. Did it ever deliver.
Coinbase opened at $381 per share, or a valuation of about $102 billion.
- That opening price was more than 50% higher than the reference price set on Tuesday night by the Nasdaq.
- Brian Armstrong, Coinbase’s 38 year old CEO who owns a 20% stake, immediately became one of the 100 richest people in the world.
Co-founded by Armstrong in 2012, Coinbase has never shied away from its belief that cryptocurrencies — once doubted as a passing fad — will be mainstream financial assets for the long term.
“[Armstrong] said it could be a trillion-dollar market,” Adam Draper, who runs Boost VC and was one of the first VCs to hear Coinbase pitch in 2012, told The Wall Street Journal. “I had never had a founder pitch me and say ‘trillion dollars,’ and he said it so rationally.”
Why it matters: In hindsight, “trillion dollars” was an understatement. The total value of the cryptocurrency market passed $2 trillion earlier this month, with bitcoin accounting for half of that. Bitcoin’s price has soared to over $60,000 this year after trading at $7,000 in early 2020.
As it climbed, institutional investors and major corporations jumped on the bandwagon, making crypto poised to expand its role in financial markets. Goldman Sachs will soon allow private wealth management clients to invest in bitcoin and digital currencies. Tesla, which plans to accept bitcoin in payment, disclosed that it bought $1.5 billion worth of the cryptocurrency earlier this year.
Coinbase opted for a direct listing, meaning it simply put existing shares on the Nasdaq. So take that, SPAC bubble.