Here comes the Coinbase IPO (initial public offering), with shares in the cryptocurrency exchange set to start trading later today under the ticker COIN in what many see as a watershed moment for cryptos.

Investors should brace themselves, there could be more action than a Tom Cruise movie because the company won’t go public with a normal IPO, but a direct listing, which will allow current stake owners to sell their shares to new investors on the day.

MASSIVE INVESTOR INTEREST

Coinbase is the talk of Wall Street. Leeor Shimron, analyst at FundStrat Global Advisors, described the Coinbase listing as seminal, deVere Group’s founder Nigel Green called the firm’s direct listing a ‘truly momentous day for the cryptoverse.’

If it hits its private market valuation of $100 billion, it would immediately become one of the 85 most valuable companies in the US. ‘This is driven by the fact the world’s two biggest cryptocurrencies, bitcoin and ethereum, to which Coinbase is intrinsically linked, have risen 800% and 1,300% respectively over the last year,’ said deVere’s Green.

 Graphic courtesy of Visual Capitalist

Coinbase, whose users primarily deal in bitcoin and ethereum, reported last week that its revenue soared 847% in the first quarter to $1.8 billion, and that it now has 56 million verified users.

MAINSTREAM ADOPTION

Wedbush analyst Dan Ives said the listing is a reflection of cryptos’ mainstream evolution as they become increasingly embedded in the global financial system. The direct listing on the Nasdaq will also widen the investment base beyond the crypto evangelists.

Bitcoin, the world’s largest cryptocurrency by market capitalisation, hit all-time highs of nearly $64,000 on yesterday (13 April) yet there are few ways to get ownership of cryptocurrencies outside of buying them directly. There’s Bitcoin miner Argo Blockchain (ARB), for example, and an emerging number of ETFs, although UK investors can’t put these cheap tracker funds into ISAs or SIPPs under current rules.

That gives Coinbase a rarity factor. With stock traded on Nasdaq, it will represent an easy-access route to crypto investment for investors, and it’s likely to appear on most investment platforms over the coming days.

Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account.

Issue Date: 14 Apr 2021