US, WASHINGTON (ORDO NEWS) — The upcoming public listing of the cryptocurrency platform Coinbase on the NASDAQ exchange sparked an active discussion in the Western media. Cryptocurrency proponents believe that Coinbase’s listing will be a critical milestone on the road to cryptocurrency recognition as an investment product. Opponents point out their shadowy sides.
Western media are actively discussing plans for the upcoming public listing of the cryptocurrency platform Coinbase. It will be the first crypto exchange in the world to be publicly traded on the stock market.
The Wall Street Journal underlines the importance of this event for the formation of a rapidly growing cryptocurrency market. Analysts see the NASDAQ listing of Coinbase as a major milestone in meeting investor demands for greater reliability and transparency in the new financial segment. Until now, the volatility of Bitcoin and other cryptocurrencies has limited their use as a means of payment.
Germany’s Frankfurter Allgemeine Zeitung also believes that Coinbase’s listing will be a critical milestone on the road to widespread acceptance of cryptocurrencies as an investment product.
France’s La Tribune notes that Coinbase goes public on April 14 on the NASDAQ exchange, bypassing the classic IPO procedure, using a direct listing. This means that not new shares will be sold, but securities already owned by shareholders.
According to the Parisian Le Figaro, investors around the world will closely monitor the placement.
Cryptocurrency proponents see the Coinbase listing as an additional legitimization of this highly specific financial instrument, which is still viewed with distrust by traditional investors, financial regulators and the general public. In addition, the very fact of one of the largest placements of this year in the NASDAQ tech sector is important.
Coinbase is the world’s largest online marketplace for buying and selling cryptocurrencies. It was founded in San Francisco in 2012 and provides services to institutional and private investors. Today it serves 43 million customers in more than 100 countries around the world. In a recent private deal, Coinbase was valued at $ 68 billion, but NASDAQ estimates it to be worth $ 77 billion. By conducting a direct public listing, a company saves the money it would have to pay investment banks in a traditional IPO, and also dispenses with costly presentations. Unlike a regular offering, the company does not issue new securities, but will sell existing stock to investors and employees.
In this case, the main goal of Coinbase is not so much getting “fresh” money, how much the official recognition of investors and financial authorities. For NASDAQ, a direct listing of this size will also be the first of its kind. Spotify, Slack and Palantir have already had large direct listing on the New York Stock Exchange. Coinbase is expected to place the funds received from the listing in a “war chest” that will allow it to survive periodic volatility in the cryptocurrency market.
The Coinbase platform is closely related to Bitcoin, Ether and other cryptocurrencies, which account for 96% of its revenues from trading. At the same time, the leading role is played by bitcoin, which has doubled in price since the beginning of the year, exceeding the $ 57 thousand mark. In the current situation, demand is growing not only for bitcoin, but also for other cryptocurrencies. Coinbase’s revenue more than doubled in 2020 to reach $ 1.28 billion, according to the US Securities and Exchange Commission. Analysts associate its success, in particular, with global financial instability and the coronavirus epidemic, which undermined investor confidence in traditional currencies.
According to the French business La Tribune, both traditional and “new” investors, as well as companies and simply wealthy individuals, including Elon Musk, began to move into the camp of supporters of cryptocurrencies. Musk recently announced that he is ready to sell Tesla cars for Bitcoin. The price in this case will be a little over two bitcoins per car. After this announcement, Bitcoin has risen sharply in value. At the same time, Musk is betting on his own cryptocurrency – Marscoin.
Paris-based Le Figaro reminds us that the Coinbase platform also has “shadow sides”. So, in March of this year, the US Commodity Futures Trading Commission (CFTC) imposed a fine of $ 6.5 million on Coinbase for artificially inflating transaction rates between 2015 and 2018 in order to mislead investors. With regard to cryptocurrencies, there are still strong objections of both technical and psychological nature.
Despite the recent successes of Bitcoin and other cryptocurrencies, the number of opponents of this payment form is still large. At the last Davos Economic Forum, most of the leading Western financiers (including the Governor of the Bank of England Andrew Bailey, ex-head of Goldman Sachs Lloyd Blankfein and others) expressed serious doubts about the prospects of cryptocurrencies. In their opinion, they cannot be used as a means of payments and savings due to their volatile value and high volatility. A growing number of economists are concluding that the future lies with central bank digital currencies that will be tied to real money.
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