The public listing of the biggest cryptocurrency exchange of the United States - Coinbase Global Inc, marks an important milestone for transformation of cryptocurrencies from being a niche technology to one that is a part of the mainstream financial system.
This public listing is the largest ever for any cryptocurrency company. The company had been valued at about $68 billion this year in private market transactions last month compared to a valuation of $5.8 billion in September last year, said the San Francisco-based firm.
This listing is also the latest move that accelerate the wider acceptance of cryptocurrencies. It was only a few years ago that this asset class had been shunned by mainstream finance, said investors, analysts and executives.
"The listing is significant in that it marks the growth of the industry and its acceptance into mainstream business," said William Cong, an associate professor of finance at Cornell University’s SC Johnson College of Business.
The price of the largest cryptocuurency in the world bitcoin hit a record of over $63,000 on a day ago while its value has more than doubled in the last year with institutional investors, a range of banks from Goldman Sachs to Morgan Stanley and global companies such as Tesla have accepted this cryptocurrency.
That wider public acceptance is expected to be sped up by this direct listing of Coinbase – which means that the company has not sold any shares prior to its market debut. According to analysts and investors, this listing will boost awareness of crytpocurrency related assets among investors.
"This is a very positive thing for bitcoin in itself, as it proves the bridge that has been built from an esoteric, left-of-field arena, full of cowboys, to mainstream finance," said Charles Hayter of data firm CryptoCompare.
However caution over long-term prospects for Coinbase and the crypto sector was sounded by some institutional investors.
There was cause of concern for the hype around cryptocurrencies, said the Swiss asset manager Unigestion, and added that it would consequently not be purchasing any shares of Coinbase.
"We think there is a lot of frenzy and exuberance in everything that looks like crypto," said Olivier Marciot, a portfolio manager at Unigestion, which oversees assets worth $22.6 billion.
"Hedge funds and retail will probably be the early birds in these new stocks - probably buying into them pretty heavily - which shouldn't be a clear indication of how they will be in the longer term."
The exposure of Coinbase to highly volatile assets that still is not as regulated as the rest of the financial market is another risk for the stock, said others experts. There are about 56 million users globally of Coinbase and about $223 billion assets on its platform which account for about 11.3 per cent of the total crypto asset market, claimed the company founded in 2012in its regulatory filings.
The extent to which revenues have surged in lock-step with the rally in bitcoin trading volumes and price was highlighted in the company's most recent financial results.
(Source:www.investing.com)
This public listing is the largest ever for any cryptocurrency company. The company had been valued at about $68 billion this year in private market transactions last month compared to a valuation of $5.8 billion in September last year, said the San Francisco-based firm.
This listing is also the latest move that accelerate the wider acceptance of cryptocurrencies. It was only a few years ago that this asset class had been shunned by mainstream finance, said investors, analysts and executives.
"The listing is significant in that it marks the growth of the industry and its acceptance into mainstream business," said William Cong, an associate professor of finance at Cornell University’s SC Johnson College of Business.
The price of the largest cryptocuurency in the world bitcoin hit a record of over $63,000 on a day ago while its value has more than doubled in the last year with institutional investors, a range of banks from Goldman Sachs to Morgan Stanley and global companies such as Tesla have accepted this cryptocurrency.
That wider public acceptance is expected to be sped up by this direct listing of Coinbase – which means that the company has not sold any shares prior to its market debut. According to analysts and investors, this listing will boost awareness of crytpocurrency related assets among investors.
"This is a very positive thing for bitcoin in itself, as it proves the bridge that has been built from an esoteric, left-of-field arena, full of cowboys, to mainstream finance," said Charles Hayter of data firm CryptoCompare.
However caution over long-term prospects for Coinbase and the crypto sector was sounded by some institutional investors.
There was cause of concern for the hype around cryptocurrencies, said the Swiss asset manager Unigestion, and added that it would consequently not be purchasing any shares of Coinbase.
"We think there is a lot of frenzy and exuberance in everything that looks like crypto," said Olivier Marciot, a portfolio manager at Unigestion, which oversees assets worth $22.6 billion.
"Hedge funds and retail will probably be the early birds in these new stocks - probably buying into them pretty heavily - which shouldn't be a clear indication of how they will be in the longer term."
The exposure of Coinbase to highly volatile assets that still is not as regulated as the rest of the financial market is another risk for the stock, said others experts. There are about 56 million users globally of Coinbase and about $223 billion assets on its platform which account for about 11.3 per cent of the total crypto asset market, claimed the company founded in 2012in its regulatory filings.
The extent to which revenues have surged in lock-step with the rally in bitcoin trading volumes and price was highlighted in the company's most recent financial results.
(Source:www.investing.com)
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