Digital currency is popular again, and Coinbase, the first crypto stock, is listed

Author: Zhou Zhou

For the first time, a cryptocurrency exchange stood on the Nasdaq stage.

As one of the world's largest cryptocurrency exchanges, Coinbase was listed on the Nasdaq exchange on April 14. It also became the first cryptocurrency exchange to be listed.

After the listing, Coinbase's stock price soared above the reference price of $250 to a high of $429, but then fell all the way back to close at $328.28, giving Coinbase a valuation of $85.8 billion.

On the first day of Coinbase's listing, its stock performed very enthusiastically. What is the reason behind it?

Industry insiders said that this is closely related to the trend of Bitcoin. It is reported that Bitcoin exceeded $63,000 on Tuesday, setting a record high.

In addition, after a cryptocurrency is listed, its value generally soars within a few days. This phenomenon is also reflected in the cryptocurrency exchange Coinbase.

Yu Jianing, president of Huobi University, told Jiemian News that the listing of Coinbase is a very important milestone in the development of digital asset trading platforms, which may help digital assets to "go out of the circle" again and bring the industry into the next stage of "compliant development". The listing of Coinbase can not only promote the acceptance of digital assets by capital, but also help promote the improvement of laws and regulations on the digital asset industry in various countries, and promote further research and thinking on the compliance of digital assets in various countries.

Next, let’s take a look at who Coinbase is, how it performed during its IPO, and what impact its IPO will have on digital currencies.

Coinbase is a popular cryptocurrency exchange known for its intuitive, user-friendly interface.

The exchange, founded in 2012 by former Airbnb engineer Brian Armstrong and former Goldman Sachs trader Fred Elsman, offers a range of tools to help investors learn about different types of cryptocurrencies and rewards them for watching educational tutorials on cryptocurrencies.

Currently, Coinbase has more than 53 million users. They trade more than 50 cryptocurrencies including Bitcoin, Ethereum and Litecoin through Coinbase. Coinbase also provides credit cards and digital wallets for storing crypto assets to customers who want to shop with cryptocurrencies.

Cryptocurrency is considered a disruptive thing, so it is not surprising that Coinbase decided to avoid an initial public offering in order to maintain this disruption.

An initial public offering requires working with financial institutions to market and sell its shares.

In contrast, a direct listing bypasses financial institutions and sells shares directly to the public.

Without bank underwriting, it is generally considered a lower-cost but higher-risk option for companies. However, cryptocurrencies and cryptocurrency exchanges are considered by many practitioners to have the "spirit" of subverting the existing financial system, so choosing a direct listing is also a natural choice.

For example, Spotify chose a direct listing when it went public in 2018, and Slack did the same in 2019.

Coinbase has been criticized by some cryptocurrency traders, mainly due to its high fees for trading and buying cryptocurrencies.

Coinbase charges a 0.5% fee, while other exchanges charge between 0.05% and 0.1%.

Another problem some traders face is the relatively small number of cryptocurrencies that can be traded on Coinbase. There are over 5,000 cryptocurrencies, and Coinbase only trades around 50 of them.

For example, Dogecoin, which is highly praised by Musk, has been favored by many traders this year, but it cannot be traded on Coinbase.

As early as 2018, Coinbase users discovered that their Visa cards were being charged multiple times for transactions on Coinbase.

It turns out that credit card issuers recently changed the way they process cryptocurrency transactions, resulting in multiple charges, which undoubtedly hurt traders.

Separately, Coinbase CEO Brian Armstrong published a blog post in October calling for a politically neutral workplace, following which 5% of employees left the company.

Although Armstrong clarified his intentions in a subsequent post, the incident was widely criticized.

Reference articles:

Coinbase stock: What you should know about the crypto exchange that just went public