Earlier this week Coinbase, one of the largest cryptocurrency platforms, went public on the Nasdaq. The company will be directly listed as $COIN and has an estimated valuation of $100 billion on the first trading day.
This can only be perceived as a good thing for many of the popular cryptocurrencies like Bitcoin, Ethereum, and Ripple. The amount of interest and the high valuation on the first day is another testament to the ever-growing belief and popularity in cryptocurrencies. Now more than ever, common folk would be more trustful of buying and selling crypto as an exchange as big as Coinbase gets listed on the Nasdaq.
This move in theory should help Bitcoin reach new highs. Investors who previously were not comfortable buying Bitcoin can instead buy shares of Coinbase and still reap the rewards of the popular coin. While there are skeptics who say the listing would have a negligible effect on the price of Bitcoin, many agree that the stock would be highly susceptible to volatility spikes. Since 86% of Coinbase’s revenue is from transaction fees, the demand for crypto and day-to-day price movement can impact the performance of the stock erratically. It may be the case that when cryptos are down, so are the transactions to buy and thus $COIN may move lower on quick notice and vice versa for bullish rallies.
Nonetheless, an exchange as big as Coinbase being listed is a step in the right direction. This power move should help with creating more awareness about crypto and reassuring skeptics about its practicality and security.