The entry into the market of the Coinbase crypto exchange today caused another jump in cryptocurrencies, bitcoin grew by 5% to $ 63.22 thousand.Analysts have different opinions, and the company’s valuation ranges from $ 60 billion to more than $ 100 billion.
Today, Coinbase will be the first publicly traded company in the cryptocurrency sector, with Nasdaq pricing Coinbase’s stock reference price at $ 250 ahead of its upcoming direct listing.
This speaks of the market valuation of the world’s largest cryptocurrency exchange at $ 65.3 billion before the start of trading its shares on the stock exchange.
Cryptocurrencies Bitcoin and Ethereum hit new highs on Tuesday amid optimism from their investors regarding the Coinbase listing. Bitcoin is up more than 5%, surpassing the $ 63,220 mark.
In addition, the demand for bitcoins and interest in Coinbase are based on expectations that the largest US banks Morgan Stanley (MS) and Goldman Sachs (GS) will soon launch digital currency services for their clients.
The market value of Coinbase by experts ranges from $ 60 billion to more than $ 100 billion, and if the company reaches a market capitalization of $ 100 billion, it will become one of the 85 most valuable companies in the United States.
Statistics for the five largest direct listings on the New York Stock Exchange (NYSE) – Spotify (SPOT), Slack (WORK), Palantir (PLTR), Asana, and Roblox – show that their stock prices were on average at opening day on the first day. was about 37% above the reference price.
Earlier this month, Coinbase reported gigantic revenue growth ahead of direct listing, as Bitcoin and Ethereum prices climbed more than 800% and 1300%, respectively, over the past year.
Coinbase – company risks compose a 27-point list
Coinbase’s documentation, filed with the US Securities and Exchange Commission (SEC), states that the company’s future today is almost entirely dependent on the price of cryptocurrencies and trading volumes, as the crypto exchange earns on transaction fees (buying / selling cryptocurrencies).
Coinbase’s list of volatility and risks includes 27 items, which include: changes in investor confidence, negative publicity and social media coverage, regulatory issues and service disruptions related to technology, and more.
Analysts point to both the difficulty in predicting cryptocurrency prices and the unpredictability of financial indicators
Coinbase. In the case of Coinbase, fundamental analysis of profit quality, customer retention, and performance will not help investors.
“Valuing any startup can be a daunting task, but I think the valuation issue is much more difficult for a company like Coinbase,” said Natalie Hwang, managing partner and founding partner of investment firm Apeira Capital.
Competitive risks for Coinbase are on the rise
In addition to falling cryptocurrency prices, analysts see growing competitive threats as another key risk for Coinbase.
For example, the popular Robinhood app does not charge commissions for purchases in cryptocurrency.
Research firm New Constructs wrote in a report last week that competition from companies such as Kraken, Gemini and Binance will “hit” Coinbase’s future fee and commission income and its “competitive position will inevitably deteriorate.”
Competitors “are likely to offer lower or zero trading fees as a strategy for capturing market share,” wrote New Constructs.
The firm said that, according to its analysis, Coinbase should be valued at $ 18.9 billion, down 81% from its expected market capitalization.