(MENAFN- Gulf Times) Cryptocurrency exchange Coinbase makes a highly anticipated stock market debut on Nasdaq Wednesday amid frenzied interest in bitcoin and other virtual currencies despite concerns about a bubble.
The first company devoted entirely to cryptocurrency to enter the US stock exchange, listed under the symbol COIN, is already a heavyweight.
The Nasdaq on Tuesday night set a reference price for the company at $250 per share, which, after taking into account the shares in circulation, stock options and restricted shares, would put Coinbase's overall valuation at $65.3bn.
That makes Coinbase the biggest new US stock market entrant since Uber in 2019. Coinbase chose a direct listing, which does not allow it to raise new funds but does offer current shareholders — founders, employees and historical investors — the opportunity to sell their shares on the market.
Spotify, Slack, Palantir and Roblox have also used this method for their Wall Street debuts.
Coinbase has benefited from bitcoin's meteoric rise over the past year, with the crypto asset's price rising from $6,500 last April to new records of as high as $64,000 on Wednesday.
Other virtual currencies — such as ether, Litecoin or Stellar Lumens — have also surged in line with bitcoin. Founded in 2012 in San Francisco by Brian Armstrong and Fred Ehrsam, the platform allows users to buy and sell about 50 cryptocurrencies, including bitcoin and ether.
Coinbase claims 56mn total users and more than six mn people making transactions each month, according to estimates from its first-quarter results, released in early April.
'With bitcoin already having more than doubled in the last six months and cryptocurrencies becoming more popular with more mainstream investors, it can certainly be argued that crypto has become more mainstream in the last 12 months, said Michael Hewson, chief market analyst at CMC Markets UK.
As a result of this craze, Coinbase's revenue has increased almost tenfold in the course of a year to $1.8bn in the first quarter, according to company estimates.
Its profit increased 25-fold, in the range of $730mn to $800mn.
The success of Coinbase and cryptocurrencies in general has given some rivals ideas: the head of the California-based cryptocurrency exchange platform Kraken told CNBC last week he hopes to take his company public next year, also via a direct listing.
If the situation seems favourable to Coinbase, caution remains the order of the day among observers, who recall the company's dependence on the price of virtual currencies, which tend to be volatile.
Before its spectacular rise in recent months, bitcoin had experienced setbacks, particularly in 2018 when it kept falling.
Some also are drawing attention to the distrust of lawmakers in several countries who are concerned about cryptocurrencies being used for illicit purposes.
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