Cryptocurrency exchange Coinbase's market entry today triggered another jump in cryptocurrencies, with bitcoin rising 5% to $63.22k Analysts have differing opinions, with valuations ranging from $60bn to more than $100bn.
Coinbase will become the first publicly traded cryptocurrency company today, with Nasdaq estimating a $250 reference price for Coinbase shares ahead of an upcoming direct listing. This suggests a market valuation of the world's largest cryptocurrency exchange of $65.3bn before its shares start trading on the stock exchange.
Cryptocurrency prices of bitcoin and etherium hit new highs on Tuesday amid optimism among their investors about Coinbase's listing. Bitcoin rose more than 5 per cent, surpassing the $63,220 mark. In addition, bitcoin demand and interest in Coinbase is based on expectations that major US banks Morgan Stanley (MS) and Goldman Sachs (GS) will soon launch digital currency services for their clients.
Experts' estimates of Coinbase's market value range from $60 billion to more than $100 billion, with the company reaching a market capitalisation of $100 billion. it would rank among the 85 most valuable companies in the US.
Statistics from the five largest direct listings on the New York Stock Exchange (NYSE) Spotify (SPOT), Slack (WORK), Palantir (PLTR), Asana and Roblox show that their share price was about 37% above the reference price on average when trading opened on the first day.
Earlier this month, Coinbase reported gigantic earnings growth ahead of its direct listing, as bitcoin and etherium prices rose more than 800% and 1,300% respectively over the past year.
Also, Coinbase's filing with the US Securities and Exchange Commission (SEC) states that the company's future today depends almost entirely on cryptocurrency prices and trading volumes, as the crypto exchange earns on transaction fees (buying/selling cryptocurrencies).
Coinbase has 27 items on its list of volatility and risks, which include: changes in investor confidence, negative publicity and social media coverage, regulatory issues and service disruptions related to the technology, among others.