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Coinbase priced at US$328 per share on stock market debut

San Francisco-based crypto exchange platform Coinbase closed at a market cap of US$62 billion and a final price of US$328.28 per share during its stock market debut on April 14. Moreover, the startup company became the first major cryptocurrency exchange platform to go public in the United States.

The shares opened at US$381 that quickly rose to US$429.50 per trade within a few hours. Coinbase decided to sell its stocks through direct listing instead of the more traditional route of enlisting for an initial public offering (IPO). This allowed employees and existing stakeholders to sell their shares at a market-based price.

Historical feat for the crypto industry

After years of scepticism from Wall Street and financial regulators, Coinbase’s public offering is considered a monumental feat for the crypto market. According to CEO of venture capital funding Tusk Ventures Bradley Tusk, traditional traders may be warming up to the crypto industry.

‘People have had doubts about crypto for a long time. And I don’t blame them,’ said Tusk in an interview with the National Public Radio.

‘But what it did become, whether it was intended or not, is an asset class—something that people looking for a really balanced portfolio [wants] to be in,’ he added.

Although dubbed as a watershed moment for crypto by CNBC, there are still looming concerns about the volatility of digital assets that may affect the price of Coinbase shares in the long run.

However, Carol Alexander, an economist and finance professor at the University of Sussex Business School, thinks otherwise. In her interview with CNBC, the risk management from a regulatory and operational perspective is much better at Coinbase compared to its competitors.

‘They’ve got this solid revenue stream from the fees and the custodial services as well. There’s no real competitor to them on the centralized exchanges because Kraken, Gemini— I don’t think they’re the next ones to go,’ she said.

As of March 31, Coinbase holds 11.3% of the world’s crypto assets. According to analysts at investment and banking financial firm BTIG, this helped the crypto company’s bullish run in the Nasdaq trade.

‘We believe COIN, the most popular consumer-facing cryptocurrency exchange in the U.S., is positioned to be a primary beneficiary of the increased adoption of Bitcoin and other digital assets as it continues to scale in the U.S. and internationally,’ the financial firm stated in a memo for their clients.

In the first quarter of 2021, Coinbase revenue was estimated at US$1.8 billion that is nine times bigger than their profits from the same time last year. Moreover, the number of users in the exchange rose from 6.1 million to 2.8 million in a span of three months according to a CNBC report.

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