Digital currency exchange Coinbase saw its value top £80billion on its stock market debut in New York last night.
In one of the most exciting flotations for a decade, Coinbase shares were expected to open at $250 but instead started trading at $381 before reaching $429.
That valued the company at £81billion, making it more valuable than all but four companies listed on the stock market in London and almost as big as Goldman Sachs.
Cashing in: Coinbase Employees celebrate on Wall St as the digital currency exchange’s value soars
Shares drifted lower in later trading, closing at $328. The float has made its founders – former Airbnb engineer Brian Armstrong and ex- Goldman Sachs trader Fred Ehrsam – two of the world’s richest men.
It is understood Armstrong’s stake is worth almost £11billion. Founded in 2012, Coinbase is the biggest company of its kind in the US and makes money by taking a small cut of the crypto-currencies traded on the platform by individuals and institutions.
Armstrong, who is also chief executive, said: ‘Hopefully Coinbase going public and having this direct listing is going to be viewed as kind of a landmark moment for the crypto space.’
The exchange was used by Tesla in February when Elon Musk’s firm snapped up £1billion in bitcoin.
The float proves that crypto-currencies are now mainstream as bitcoin prices hit a record high of $64,800.
Coinbase officially had 43m customers in 2020, with 2.8m making transactions monthly.
Revenue more than doubled to £820million last year and it swung to a profit of £233million after losing tens of millions in 2019.But not everyone is convinced.
David Trainer, chief executive at research firm New Constructs, said Coinbase has ‘little-to-no-chance of meeting the future profit expectations that are baked into its ridiculously high valuation’.
Some fear that the bitcoin volatility may affect crypto-currency business – and that there could be a crackdown by regulators.
Armstrong said regulation was ‘right up there with cybersecurity’ in posing a threat to the crypto-economy He said: ‘We’re very excited and happy to play by the rules.
And basically, we just ask that, hey, we want to be treated on those level playing fields with traditional financial services at the very least, and not have any kind of punishment for being in the crypto space.’
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