Netscape 2.0: Coinbase Stock Premiere Revives Memories of Web Advances
For cryptocurrency enthusiasts, this week’s successful listing on Coinbase’s stock market is the modern equivalent of the Netscape debut that pushed the Internet into major finance a quarter of a century ago.
The initial public offering of the web browser – then a start-up company in Silicon Valley – came before Microsoft Internet Explorer entered its best-selling computer software. It was time to get to the ground floor of a life-changing technology.
Still, the launch in 1995 left some fund managers scratching their heads: how do you value this company? Is it really a game changer?
A similar conversation is taking place today on Wall Street after more than 120 million shares of Coinbase ($ 43 billion) were manually traded on Wednesday and Thursday, raising its valuation to $ 65 billion, according to the Intercontinental Exchange, the owner of the New York Stock Exchange. .
The public market launch of the company, which has digital assets for 56m retail customers and makes the largest exchange of digital coins in the US, shows how bitcoin and other digital assets are moving from border to border. main stage.
Netscape IPO “was printed in public psychic moment:‘ What is the internet? What is a network? ‘”Said President Tom Jessop Fidelity Digital Assets. “This transaction is probably very important.”
Several asset managers have submitted plans to launch bitcoin-traded funds to the Securities and Exchange Commission. A few companies, including the Tesla and Square payment groups, have bought bitcoin to store their balance sheets. And this week the Brevan Howard hedge fund invested up to 1.5 percent of its key funds in cryptocurrencies, according to a report on the subject.
Goldman Sachs, which advised Coinbase on the float, is restarting the cryptocurrency derivatives trading desk as the money managers of the organizations warm up to the market. Goldman’s chief executive this week told investors he wanted to “find ways to expand our capabilities” in the crypto.
Skeptics note that cryptocurrencies have not yet been accepted in other key areas of the payment and financial system. Federal Reserve Chairman Jay Powell on Wednesday called the cryptocurrency a “vehicle for speculation,” reflecting a view that is still prevalent among politicians around the world.
Cryptoconferencing has also sparked outrage from prosecutors and regulators, who are concerned about money laundering and investor risks due to their high volatility, as well as alarms. environmental damage influenced by bitcoin mining. In 2018, the head of the Bank for International Settlements, Agustín Carstens, said that “cryptocurrencies, in short, are a bubble, a Ponzi scheme and an environmental catastrophe.”
Although Coinbase’s debut was a critical moment for the crypto markets, the company had to abandon some of its ambitious plans. According to the people involved in the process, the token sale was eventually canceled, a type of digital asset that would form a class of Coinbase shares after the company made an effort to find a sufficient accumulation of brokers authorized to trade them.
The Coinbase list, which raised at least $ 3.4 million for shareholders who sold it on the opening market on Wednesday, does not guarantee a strong track record in exchange or cryptocurrencies. The rise in Bitcoin prices has helped spark investor interest in digital currency, and a reversal could hurt its prospects. Already, the rise in retail trade that captivated Wall Street and public investment in January and February has begun to fade.
Bitcoin and other assets have appeared on the verge of taking over before; in a high-profile delay in 2019, derivatives exchange Cboe pull the plug bitcoin for lack of interest in future investors.
There are still more lists of cryptocurrencies up and running. Bakkt is a provider of wallets sponsored by the Intercontinental Exchange making it public merging with a shell company. He is also the CEO of Kraken, a rival to Coinbase he set his own intentions to make it public. The company’s shares have recently changed hands, with prices that would provide an implicit valuation of $ 10,000 to $ 15 billion, according to information on the trades.
Coinbase has proven to be profitable, with net revenues of at least $ 730 million in the first quarter. This suggests that intermediaries and exchanges may earn a business profit compared to the shares that can process much larger volumes of stock trading.
Coinbase’s regulatory archives, including quarterly and annual reports and investor presentations, will now give the business a look in a way people haven’t seen before.
“It’s a phenomenon that traditional organizations can’t do today,” Jessop said, noting the company’s large user base. “It’s clear that the revenue is attractive.”
For a broader cryptocurrency ecosystem, the Coinbase list “legitimizes the industry in a new way,” said Stephen Wink, a partner in the law firm of Latham & Watkins, who advised banks on the transaction. “People understand that the SEC process of becoming a public company is rigorous, which gives them the comfort of being on a solid ground in what they’re doing. That gives them real credibility to do it all.”