Crypto firm Coinbase valued more than oil

Cryptocurrency company Coinbase, which runs one of the major exchanges for Bitcoin and other digital currency transactions, reached a market value of almost $ 100bn (£ 72.5bn) on its listing.

The shares debuted on the Nasdaq at a price of $ 381, but then closed below $ 330. The initial valuation put Coinbase ahead of many well-known companies, such as the oil giant BP and major stock exchanges. The list was seen as the latest step towards cryptocurrencies gaining greater acceptance among traditional investors. The price of Bitcoin increased more than 300% last year, and has risen even more in 2021, as companies such as Tesla.

It hit a record high of over $ 63,000 on Tuesday, ahead of the Coinbase listing. Mastercard and BlackRock revealed plans to incorporate digital currencies into their businesses. Lesser-known digital currencies have also made a profit on Dogecoin, which was created as a joke, rising more than 70% to more than 13 cents. Bitcoin surpasses $ 60,000 for the first time Bitcoin: from buying a Bentley to losing it all Bitcoin consumes ‘more electricity than Argentina’

‘Barometer’ for cryptoUS-based Coinbase, which makes money primarily by charging transaction fees, has benefited from growing demand. Founded in 2012, Coinbase had more than 56 million users in more than 100 countries and had about $ 223 billion in user assets at the end of March. It reported $ 1.8 billion in estimated revenue in the first three months of 2021, more than its total for all of 2020, as interest in Bitcoin and other digital currencies surged.

Compared to 2018, when investors calculated that Coinbase was worth $ 8 billion in a round of private financing, the value of the company has multiplied by more than ten. Wednesday’s listing was set to make Coinbase co-founder and CEO Brian Armstrong one of the richest people in the world. The 38-year-old, a former Airbnb software engineer, owns about a 21% stake in the company.

For outside investors, buying shares in Coinbase is seen as a potentially less risky way to take advantage of activity in the crypto market, without investing directly in Bitcoin or other digital currencies, which have drawn warnings from financial regulators. But Jane Foley, senior currency strategist at Rabobank said that if stricter rules are enacted, they could change Coinbase’s outlook.

 

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