Coinbase is getting listed in the Nasdaq under the COIN ticker on April 14 and the sheer anticipation is sending shockwaves across the crypto industry. Many crypto enthusiasts and investors are expecting the event to have a positive and far-reaching impact on the industry. For crypto investors looking to jump on the Coinbase bandwagon, it is important to ask whether the optimistic conjecture is justified and if the company is really headed for greater heights.
The excitement surrounding the Coinbase listing event is justified considering that the timing correlates to bitcoin’s biggest price upsurge in recent years. It also comes at a time when the cryptocurrency industry has broken the $2 trillion market capitalization mark and gained greater acceptance among top Wall Street luminaries. Clearly, the zest for digital currency investments is no fluke.
As underlined by Coinbase statistics, its userbase grew by an unprecedented 117 percent quarter-over-quarter this year to reach 56 million verified users with 6.1 million monthly transacting members. The exponential increase is in and of itself a strong indicator that interest in cryptocurrency investments and in the company is increasing and will ultimately amplify Coinbase’s growth.
Another plus to the listing is the floatation mode which plays well to the industry decentralization dynamics. By choosing a direct listing instead of an Initial Public Offering, both retail investors, as well as established institutions, will have an equal trading opportunity once the COIN ticker gets activated.
Coinbase’s decision to become a publicly traded company seems a bit belated and comes at a time when the company appears to have hit a growth apex propelled by widespread bitcoin FOMO. As such, many Wall Street analysts predict that the company will struggle to maintain its current performance in the medium-term. The company has reported $1.8 billion in revenues generated in the first quarter of the year, an over 800 percent increase compared to the same time last year. This is a very high bar to maintain.
Understandably, Coinbase has cautioned about the mercurial nature of the cryptocurrency industry in its earnings report, which it says will inevitably impact its growth and revenues.
Despite the aforementioned headwinds, there is a myriad of factors that could enable the company to weather a few storms this year. The biggest of them all is the current sentiment surrounding the cryptocurrency market. Historically, the value of listed cryptocurrency companies tends to move in lockstep with bitcoin price movements, and at the moment, the trajectory is positive.
Looking at companies such as Riot Blockchain, Canaan Creative and Marathon Digital Holdings, their value has increased by over 600 percent in the past year due to bitcoin’s escalation. Marathon Digital share prices have, for example, skyrocketed by an astronomical 10,000 percent due to the bullish sentiment. This element makes it hard to be bearish about the Coinbase listing, especially since the company is virtually a keystone in the US cryptocurrency ecosystem.
Looking at its fundamentals, its numbers are solid. It has a net income of between $730 million and $800 million, and its on-platform assets are valued at a staggering $223 billion.
Of course, among the main factors to bank on as an investor is whether the company will remain center stage in the American cryptocurrency sector for a long time, and right now, as it has in the past ten years, it seems well-positioned to continue with the trend.