Coinbase’s highly successful IPO on April 14 marks a turning point in the markets’ perception of cryptocurrencies and the environment they operate in, described by The New York Times as “crypto coming out party.”
The company closed lower after its first day of trading with a valuation of nearly $65 billion, after starting at the $250 assigned by NASDAQ in its direct listing, going as high as $429 and ending up closing at $328. Coinbase’s IPO further strengthens the credibility of the cryptocurrency phenomenon: when a completely virtual company, with no headquarters and dedicated solely to cryptocurrencies reach such a high valuation, we are talking about impacting the real economy: this is no longer about high-risk products, or “something the government may ban tomorrow”.
What is Coinbase? Quite simply, the largest cryptoasset exchange platform. Founded eight years ago in June 2012 by Brian Armstrong and Fred Ehrsam and incubated at the prestigious Y Combinator, Coinbase has been able to remain a solid collateral in an environment subject to enormous changes and shocks, and to consolidate itself to be a fully distributed company employing 1,250 people, a turnover of $14 billion in 2020, 43 million verified users and 7,000 institutions, operating in about a hundred countries and with more than $1 billion in cash. By learning from an ever-evolving market and implementing initiatives to address users’ fears, such as insurance to protect them from the risk of platform theft, Coinbase has achieved a position that not only dominates, but even lends legitimacy to the cryptoassets listed on its platform.
In many ways, Coinbase has been able to take advantage of a confusing market that has witnessed several accidents and thefts that generated insecurity, driving growth in the cryptocurrency market at a time when few people believed in them. We should now see consolidate in a new phase, as some investment banks are already offering them to their clients and when they are beginning to be considered a better option than some precious metals.
The cryptocurrency-based economy is just beginning, and is still perceived, given that its pricing process is not yet complete, as speculative or a safe haven. But Coinbase’s IPO is only one more way of legitimizing cryptocurrencies, and points to the currencies of the future not being under the control of any specific state or actor and instead based on algorithms that determine their value and on completely decentralized transactional mechanisms. Nevertheless, for many people, this is still a disruption of money and therefore unthinkable. For others, it’s already a reality.
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