Coinbase Global Inc COIN.O, the largest cryptocurrency exchange in the US, will be listed on the Nasdaq on Wednesday, marking a milestone in virtual currencies' journey from niche technology to core asset.
The list is by far the largest of a cryptocurrency company, and the San Francisco-based firm said last month that private market transactions had valued the company at around $ 68 billion this year, up from $ 5.8 billion in September.
It represents the latest breakthrough for the acceptance of cryptocurrencies, an asset class that only a few years ago had been shunned by mainstream finance, according to interviews with investors, analysts and executives.
"The list is significant because it marks the growth of the industry and its acceptance into core businesses," said William Cong, associate professor of finance at Cornell University's SC Johnson College of Business.
While Slack Technologies, Palantir Technologies and most recently Roblox all listed on the New York Stock Exchange, Coinbase picked the younger bourse known for tech-oriented companies. Nasdaq on Tuesday set a reference price of US$250 a share for Coinbase’s direct listing, a number that’s a requirement for the stock to begin trading, but not a direct indicator of the company’s potential market capitalisation. Investors will have a better sense of valuation once shares start trading Wednesday.
Bitcoin, the largest cryptocurrency, hit a record high of over $ 63,000 on Tuesday. This year it has more than doubled as big investors, banks from Goldman Sachs GS. N to Morgan Stanley MS. N and big-name companies like Tesla Inc. TSLA.O appreciate the emerging asset.
At $ 250 a share, Coinbase would have a market value of approximately $ 47 billion based on the outstanding shares listed in its prospectus. Still, few, if any, trades are likely to take place at that price. So far, all of the major direct quotes have opened significantly above their benchmark price, with Roblox shares debuting at $ 64 each, 42% more than the number set by the exchange.
Other experts said the risks included Coinbase's exposure to a highly volatile asset that is still subject to spotty regulation.