Tomorrow, trading platform Coinbase will be listed on the stock exchange. The IPO ensures that many eyes are on the world of Bitcoin (BTC) and other cryptocurrency projects and that the sentiment is quite bullish.
If we are to believe some experts, Coinbase’s stock market listing and stance on Bitcoin exchange-traded funds (ETFs) that are planned could usher in another phase in the institutionalization of both the bitcoin and other cryptocurrency markets.
With Coinbase’s listing on NASDAQ, the US crypto exchange will be the first of its kind to accomplish this. Starting tomorrow, the shares in Coinbase can also be traded immediately. The presale is already taking place on cryptocurrency derivatives platform FTX. It is striking that Coinbase has a valuation of about $ 140 billion there; twice the value of the New York Stock Exchange (NYSE) and a whopping six times the value of the NASDAQ.
So is Coinbase overvalued?
Coinbase’s valuation is exceptionally high, according to some. Still, it seems wise to consider that Coinbase is profitable in an industry where a large proportion of businesses are not. For example, Coinbase has a profit margin comparable to that of PayPal and the profit margin is almost four times that of the NASDAQ. Chief Investment Officer (CIO) at Arca states the following:
“38% of tech companies are at a loss. That’s more than the 36% at the peak of the tech bubble in 2000. Yet every headline is about how overvalued Coinbase ($ COIN) is and how crypto is a bubble. ”
According to CIO at Bitwise Asset Management, Matt Hougan, the traditional financial world will grapple with the massive growth the crypto industry is experiencing. For example, he informed CNBC:
“I think we’ll see a gold rush when it comes to crypto stocks as soon as investors realize how fast the service providers within the crypto ecosystem are growing.”
ETF investors such as Global X FinTech and ARK Fintech Innovation will most likely invest in Coinbase and Amplify has also confirmed this.