For cryptocurrency enthusiasts, this week’s Coinbase US Stock Market hit list is the modern equivalent of Netscape’s beginnings that propelled the internet into the mainstream of finance a quarter of a century ago.
The initial public offering of the web browser – then a Silicon Valley startup – came long before Microsoft integrated Internet Explorer into its best-selling PC software. It was time to step into the ground floor of life-changing technology.
Yet the 1995 launch left some fund managers scratching their heads: how do you value this company? Is it really a game-changer?
A similar conversation takes place on Wall Street today after more than 120 million Coinbase shares – worth $ 43 billion – changed hands on Wednesday and Thursday, pushing its valuation to $ 65 billion, just below that of Intercontinental Exchange, the owner of the New York Stock Exchange. .
The public market launch of the company, which holds digital assets for 56 million retail customers and operates the largest digital coin exchange in the United States, was the latest in a long line of examples of how whose bitcoin and other digital assets are moving from the fringes to the main stage.
Netscape’s IPO “was the moment it was printed on the public psyche:” What is the Internet? What is the web? ”Said Tom Jessop, president of Fidelity digital assets. “This transaction is probably so important.”
Several asset managers have filed plans to launch Bitcoin exchange-traded funds with the Securities and Exchange Commission. A handful of companies, including Tesla and the payments group Square, have bought bitcoin to keep it on their balance sheets. And this week, hedge fund Brevan Howard decided to invest up to 1.5% of its main fund in cryptocurrencies, according to a person briefed on the matter.
Goldman Sachs, which advised Coinbase on its IPO, is restarting a crypto derivatives trading desk as institutional fund managers enter the market. Goldman’s chief executive told investors this week that he wanted to “look for ways to expand our capabilities” in the crypto arena.

Skeptics note that cryptocurrencies have yet to be widely adopted in payments and other critical areas of the financial system. Jay Powell, Chairman of the Federal Reserve, on Wednesday called cryptocurrencies “vehicles of speculation,” reflecting a view that still prevails among policymakers around the world.
Cryptocurrencies have also aroused the ire of prosecutors and regulators, concerned about money laundering and the risks to the investing public given their high volatility, as well as the alarm on the market. environmental damage caused by Bitcoin mining. In 2018, the director of the Bank for International Settlements, Agustín Carstens, said that “cryptocurrencies are, in a nutshell, a bubble, a Ponzi scheme, and an environmental disaster.”
Although Coinbase’s debut marks a critical moment for the crypto markets, the company has had to put some of its more ambitious plans on hold. A sale of tokens, a type of digital asset that would have formed a Coinbase share class, was ultimately called off after the company struggled to find a large enough pool of brokers authorized to trade them, according to those involved. in the process.

The listing of Coinbase, which raised at least $ 3.4 billion for shareholders who sold in the opening deal on Wednesday, does not guarantee a solid trajectory for the exchange or for cryptocurrencies. Bitcoin’s price rally has helped spark investor interest in digital currency, and a reversal could prove detrimental to its outlook. Already, the retail boom that captivated Wall Street and the investing public in January and February has started to fade.
Bitcoin and other assets appeared to be on the cusp of mainstream adoption before; in a high-profile setback in 2019, the Cboe derivatives exchange pulled the plug on Bitcoin futures due to lack of investor interest.
Still, more crypto listings are in the works. Bakkt, the crypto wallet provider backed by Intercontinental Exchange, is pass in public a merger with a shell company. The CEO of Kraken, a rival of Coinbase, also arranged his ambitions to go public. The company’s shares have recently changed hands at prices that would give it an implicit valuation of $ 10 billion to $ 15 billion, according to people knowledgeable about the transactions.
Coinbase has already shown it to be profitable, posting net profit of at least $ 730 million on around $ 1.8 billion in revenue in the first quarter. This suggests that compared to the fees established brokers and exchanges can earn by processing much larger volumes of stock transactions, it is a lucrative business.

Coinbase’s regulatory filings, including quarterly and annual reports and investor presentations, will now offer insight into the business in a way the public has never seen before.
“It’s now a phenomenon that traditional institutions cannot ignore,” Jessop said, highlighting the company’s large user base. “This is clearly an attractive revenue pool.”
For the larger cryptocurrency ecosystem, the Coinbase listing “legitimizes the industry in a new way,” said Stephen Wink, partner at law firm Latham & Watkins, who advised banks on the transaction . “People understand that the SEC’s process to become a public company is a rigorous process, so it’s reassuring that what they’re doing is on a solid footing. It gives real credibility to do all of this.