By Shelly Melancon (Switzerland)
Shortly before its public listing, Coinbase market valuation skyrocketed close to $100 billion, as private investors justled amongst themselves to own shares of the company.
According to a report on Bloomberg, the cryptocurrency exchange’s stock came within touching distance of the billion-dollar mark as huge buying activities on Nasdaq Private Market (NPM) pushed the price of a single Coinbase share to about $375.
Coinbase to Start Trading This Month
Coinbase is scheduled to start trading on Nasdaq within March. However, as with every private company doing an IPO, the company held a private sell session of its shares to raise additional capital in preparation for the event.
During the private auction which also ended on the 5th of March, the few numbers of investors who were accredited to participate were willing to offer as high as $375 per share- effectively raising Coinbase’s initial valuation to $90-$100 billion.
According to the Bloomberg report, Coinbase’s value as of last month stood at almost $77 billion- also influenced by speculation of the small number of investors in the private auction.
Coinbase Market Capitulation as IPO Draw Near
It’s worth pointing out that only a small fraction of Coinbase shares got auctioned off during the private sale at NPM.
Therefore, it may not be taken as a solid indicator of the future performances of Coinbase stock.
Specifically, only early Coinbase investors were allowed to put their shares up for sale. Some current and former employees were also granted access to sell or bid for shares.
Also, the criteria for accrediting Investors into Nasdaq Private Market leaves a very narrow chance to both individual and institutional investors, thus eliminating the possibility of an overcrowded auction window.
Coinbase Outperforms Facebook as it Set History
Based on historical data, the last time a private company attained a $100 billion capitulation before becoming a public listing was Facebook’s IPO in 2012, at $38 per share. When current economic factors are considered, Coinbase’s debut into the public market would rank as the biggest for a technology company.
A Turning Point For The Crypto Industry
Though still a nascent industry considering cryptocurrencies have only been around for about 14 years, space has grown tremendously, with the total current market cap somewhat above the trillion-dollar mark.
No doubt the cryptocurrencies and the underlying technology- that is, blockchain- are here to stay. However, a lot of investors (mostly institutional) have been skeptical about joining the crypto bandwagon, no thanks to legal uncertainties that have trailed the space.
However, all of that is bound to change with the Coinbase listing. But it would not only a great leap for cryptos alone but would also cause policymakers around the globe to seriously rethink their perception of cryptocurrencies. Interestingly, as the Coinbase IPO day draws near, there is an ongoing massive buying activity in crypto markets, indicating an increased level of optimism among users.
Coinbase is one of the largest digital asset trading platforms, with the institutional client making the majority of its customer base At the time of writing, the value of the total assets in its custody is estimated to be around $200 billion.
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