28.11.2021

Investor reaction to Coinbase listing on the stock exchange

Last week, one of the most anticipated events in the crypto industry took place – the listing of a large crypto company Coinbase on the US stock exchange.

Many experts predicted an explosive effect for the digital asset market with this news, but in the end the outcome of events turned out to be exactly the opposite. First of all, the IPO of Coinbase did not cause a new jump in the price of Bitcoin, in addition, the main cryptocurrency, along with the market as a whole, experienced one of the largest crashes in dollar terms over the weekend.

Anthony Scaramucci, founder of investment firm Skybridge, said the COIN listing did not generate the expected buzz among banks – and he is surprised by this fact. Let’s talk about the situation in more detail.

Recall that on April 14, the Coinbase cryptocurrency exchange turned into a public company, that is, its shares began to be traded on the Nasdaq stock exchange. This event became important for the entire blockchain asset industry, because no one had ever achieved such heights before. In addition, the Coinbase listing has become a kind of recognition for a niche cryptocurrency that has previously faced a huge amount of criticism.

Anyway, the event took place.

However, the reaction to it could have been much better. At least Scaramucci thinks so.

What’s wrong with Coinbase?

Scaramucci expressed his point of view during a regular broadcast on CNBC. Here is his remark, in which he shared his attitude to what is happening. The quote is from Cointelegraph.

To be honest, I am surprised by the lack of hype in the banking environment, such as there was in connection with the Netscape IPO in 1995 for Microsoft. At one time, Bill Gates considered the Internet to be only a short-term hobby. Then he realized what was happening with the Netscape IPO and invested several billion dollars in an Internet strategy that led to and adapted to Explorer [Internet Explorer, Microsoft’s browser – editor’s note]. I’m surprised commercial banks and people like JP Morgan CEO Jamie Dimon don’t invest in Coinbase.

Accordingly, Anthony initially counted on much more attention to the Coinbase listing. Although, at the same time, he clearly does not exclude the growth of interest in the company’s shares in the future.

Recall that many financiers consider the launch of the IPO of Netscape in 1995 the beginning of an era of explosive growth of the Internet. In the early days of listing on the stock exchange, Netscape shares more than doubled in value, which gave rise to the dot-com bubble – the hype around projects focused on the development of the Internet.

COIN shares failed to deliver similar returns. After a short period of trading around $ 400, their price began to plummet. By the close of the stock market on Friday, COIN was trading at around $ 342. Given the noticeable collapse of Bitcoin over the weekend, it can be assumed that at the opening of trading on Monday, the COIN price will drop even more noticeably.

However, on Monday morning the market is showing strong evidence of a recovery. For example, the native token of the Binance exchange called BNB jumped from the bottom at the level of $ 432 to $ 537 in a day. Daily growth exceeds 10 percent.

The Solana blockchain token with the SOL ticker not only did not fall over the weekend, but also set a new all-time high. The record was $ 32.75 tonight.

The relatively new project Wootrade Network, supported by well-known liquidity providers and traders from Kronos Research, is also close to its all-time high of $ 1.1. At night, the WOO rate reached $ 1.07.

However, even under such conditions, some investors managed to make huge capital on Coinbase. Among them was Harry Tan, who made about $ 2.4 billion from the IPO of the exchange. The investor invested $ 300,000 in the marketplace even at a time when the Coinbase concept existed as a service called Bitbank. At the dawn of the history of his project, the future CEO of Coinbase Brian Armstrong turned to Tan for help and asked him to be a co-founder of the platform, CryptoPotato reports.

Harry helped get the start-up highly praised by the venture capital firm Y Combinator, which allowed Armstrong’s future company to attract even more investment. Tan doubted the dollar’s indestructibility and suggested that Bitcoin could indeed become an influential alternative to the US currency. As it turned out, this decision was very profitable – as a result of the distribution of shares, Tan received a stake in the amount of $ 2.4 billion. That is, since 2013, its initial investment has grown more than 6 thousand times.

We believe that large investors really should have responded more actively to the event. Still, a cryptocurrency exchange of this scale becomes public for the first time, and this will give an impetus for the development of other representatives of this industry and the entire niche of blockchain assets in general. However, less than a week has passed since the start of trading, so the situation may soon change for the better.

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