Coinbase Day - The Daily Gwei #225

Are you ready for it?

So today is the day - the day that I believe crypto finally crosses the chasm from being viewed by the mainstream as mostly a toy or a scam to something that has real staying power and value. After today, I think that it’s going to be very difficult for the “nocoiners” to ignore a publicly traded pure-play crypto company valued at $150 billion+.

Based on the private markets, Coinbase is currently trading at a $150+ billion valuation and is set to be one of the biggest stock exchange listings of the year. This valuation actually puts it ahead of some of the world’s largest banks with Goldman Sachs trading at a $112 billion valuation and HSBC trading at a $120 billion valuation. On top of this, Coinbase will also be worth more than popular fintech/payments companies like Square (trading at $124 billion) and American Express ($117 billion). And this is only the beginning - it’s not crazy to think that Coinbase can easily trade much higher than its current valuation (especially if the crypto markets stay hot).

I think companies derive a lot of value from their stories and boy does Coinbase have a good story - it’s a classic Silicon Valley darling that grew from nothing to a $150+ billion publicly traded company that also minted a few new U.S billionaires along the way. I think that this story is going to resonate with a lot of the same people that plenty of other once-startups like YouTube, Facebook, Twitter and Tesla resonated with. It speaks to that prevailing theme that anyone can start a company from their garage, work really hard on a game-changing product or service and scale it up to become a billion dollar company. The mainstream media are absolutely going to love covering this event and I believe it’ll be talked about heavily for months to come (maybe it even becomes the new Wall Street Bets darling?).

Coinbase isn’t just a “crypto” company either - it’s also a “fintech” company that has current and future growth prospects most other fintechs could only ever dream of. Coinbase’s Q1 earnings were even more bullish than analysts predicted and the quarter on quarter growth for the exchange has been absolutely insane. Of course, given that most of Coinbase’s revenue comes from trading fees, its growth is highly dependent on how hot the crypto markets are and obviously those markets have had an insane last few months. It’s anyone’s guess where the crypto markets go from here and if they stay hot for very much longer (most people seem to believe they will) but I’m sure Coinbase isn’t going to just rely on trading fees forever - they have other products that they’ll be leaning into over time.

All of the above is to say nothing of the extreme amounts of attention that will be placed on the crypto asset class as a whole because of this listing event. Think about it - it’s going to “derisk” crypto as an asset class for so many “legacy finance” investors because it will legitimize the entire asset class. I believe that this listing will cause the stigma around crypto from “nocoiners” to slowly disappear, the asset class as a whole will mature more rapidly, people can now invest in Coinbase stock if they want exposure to the crypto markets (without the insane volatility of the assets themselves), Coinbase’s stock price may end up being used as an “index” to track the healthy of the overall cryptocurrency sector and more.

$COIN begins trading in the “early afternoon” Eastern Standard Time - strap in.

Have a great day everyone,
Anthony Sassano

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All information presented above is for educational purposes only and should not be taken as investment advice.